Universal Entertainment, the Japanese gaming device maker that is developing a resort-casino project in Manila’s Entertainment City, says the $25m payment it made to obtain land rights for the project was “unnecessary.” The payment was made in 2010 to Subic Leisure, a company registered in the British Virgin Islands, to resolve a land-rights dispute involving the property on which Universal’s Philippine subsidiary, Tiger Resorts Leisure and Entertainment, wanted to build its casino. Universal now says the land issue could have been “legally resolved prior to signing a consulting contract with Subic Leisure.”
A press release accompanying Universal’s annual earnings report contained the following statement: “In regards to the $25m said to be a payment for resolution of road problems in the Philippine resort business plan, our company is rigorously applying a conservative approach in regards to the asset nature of that, placing the entire amount in a reserve fund, and essentially reducing the assets on the books by an equivalent amount.” For the fiscal year ending March 31, Universal saw profits fall 12.5% to ¥27.45b (US $267.6m) on revenue of ¥99.1b ($966m). The company has forecast revenue of ¥102.8b for the present fiscal year.
The questionable payment was among several allegations made in a series of Reuters reports late last year regarding Universal’s dealings in the Philippines. The reports linked Subic Leisure with Rodlofo Soriano, an associate of Efraim Genuino, the former head of the Philippine Amusement and Gaming Corporation (PAGCOR) currently facing graft charges. Universal has sued Reuters for suggesting that the payments were payoffs intended to secure concessions on (among other things) foreign ownership of Philippine-based corporations. Universal has also sued several former employees it has accused of acting without authorization in cutting large checks.
The brouhaha – which has its roots in the bitter falling out between Universal boss Kazuo Okada and Wynn Resorts boss Steve Wynn – has prompted probes by everyone from Philippine legislators to Nevada gaming regulators to the US Federal Bureau of Investigation. Universal launched its own investigation in January, which produced Monday’s “unnecessary” verdict. Universal’s snoops have yet to turn in the final report on their investigation.
