September 17, 2012 / 9:03 PM / 6 years ago

Okada prepares Wynn proxy fight, cites poor board oversight

(Reuters) - The Japanese billionaire locked in a legal fight with Wynn Resorts Ltd’s (WYNN.O) chairman stepped up efforts to elect two board members by charging that the board did little to stop Steve Wynn from “questionable actions” for his “personal financial and control goals.”

Japanese billionaire Kazuo Okada listens during an interview at one of his restaurants in Hong Kong May 15, 2012. REUTERS/Bobby Yip

Kazuo Okada, who filed suit in March challenging the board’s forced redemption of his 20 percent stake in company, said shareholders had lost confidence in the casino operator’s management and board. He cited the stock’s decline of 30 percent this year.

“This loss of confidence has resulted from a history of poor corporate governance and questionable actions under the direction of Steve Wynn,” Okada wrote in the letter.

Okada calculated that only seven of the 12 board members are independent, using Nasdaq listing standards.

The Japanese businessman said he would nominate Yale law professor Jonathan Macey and former CBS Corp (CBS.N) chief financial officer Fredric Reynolds for the company’s board. The company is scheduled to hold its annual meeting on November 2.

Wynn Resorts did not make a representative available for comment.

Lawyers for Okada and Wynn are scheduled to argue in a Las Vegas court on October 2 a bid by Okada to enjoin the casino company from redeeming Okada’s shares.

In August, Okada filed a defamation lawsuit in Japan against the casino company related to the forced redemption of his shares in February.

Okada, who submitted the filing through his company Universal Entertainment Corp 6425.OS, claimed $140 million (11.2 billion yen) in damages, alleging that Wynn’s actions led to a fall in Universal’s stock price and new business opportunities, and damaged his reputation.

Until this past winter, Okada was the largest shareholder in Wynn’s $11 billion gambling empire, which has casinos in Las Vegas and Macau. He helped bankroll Wynn’s operations for more than a decade.

The two fell out publicly in January when Okada filed a lawsuit in the United States against Wynn for blocking access to financial documents relating to the company’s $135 million company donation to the University of Macau.

The Wynn board stripped Okada of his 20 percent share holding in Wynn Resorts through Okada’s U.S. subsidiary, Aruze, claiming he was unsuitable to continue as a board member after an internal investigation by former FBI director Louis Freeh alleged Okada had violated U.S. anti-corruption laws.

Both self-made billionaires claim the other made improper payments to win favor in their respective Macau and Philippines markets.

Okada, who made his fortune in pachinko - a game that is a cross between pinball and slots - is developing a $2 billion casino resort in the Philippines. He has denied his company has done anything improper to obtain government favors.

$1 = 78.7064 yen

Reporting by Ronald Grover in Los Angeles; editing by Matthew Lewis

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