Outside Investigation Concludes Universal Founder Kazuo Okada Committed Fraud
Posted on: September 5, 2017, 06:50h.
Last updated on: September 6, 2017, 01:35h.
Kazuo Okada has been formally accused of fraud by the company he founded five decades ago and built into Japan’s largest gambling empire.
Universal Entertainment, which ousted its founder from the board on July 29, announced this week that the results of a three-month external investigation allege Okada is guilty of three instances of misappropriating millions of dollars in funds “for his own personal benefit.”
It also claims Okada has “violently intimidated and threatened” another Universal exec in order to cover up the alleged fraud.
Universal’s president Jun Fujimoto announced the company had uncovered a possible “fraudulent act” in June, in the form of an “irregular” transaction of $20 million, dating from 2015, from a Universal subsidiary to Universal’s parent company Okada Holdings.
In an interview with Reuters in early July, Okada claimed that this transaction had been a directors’ loan which had been invested in junket operations for the new Okada Manila casino resort in the Philippines. Okada said the loan was not due for repayment until November and described allegations of fraud as “nonsense.”
Okada also said he was suing his wife, son and daughter over a “boardroom coup” that ousted him as chairman of Okada Holdings in May, a month before he was frozen out at Universal.
Legal action, he said, was the only way to make his family agree to dialogue and see sense. Meanwhile, he accused Fujimoto of attempting to “seize control” of Universal Entertainment.
But in a filing to the Japanese security exchange this week, Universal reiterated that it believed its former chairman was guilty of “an extreme intermingling of private and public affairs” and exhibited a “lack of a sense of ethics that one should naturally have as a director of a listed company.”
“Additionally,” it said, “based on the results of the investigation by the special investigation committee, and its suggestions for measures to prevent the reoccurrence of the acts in question going forward, the company will proceed to formulate and execute concrete measures to prevent that reoccurrence.
“Said concrete measures will be determined by the company once they have been decided on,” it added.
Universal has alleged the complicity of Yoshinao Negishi, its former director and general manager of Universal’s Administrative Division, in the purported fraud. The third-party investigators concluded that Okada threatened the executive into keeping quiet during their investigation.
“It has been ascertained based on objective materials that in fact Mr Okada paid a visit to the home of [Negishi] to violently intimidate and threaten him with respect to the subject matter of the investigation by the special investigation committee during the period of said investigation,” said Universal.
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