Universal Entertainment finds Okada guilty of fraudulent acts

Japanese slot machine manufacturer Universal Entertainment Corp says it has completed its third-party investigation into the alleged “fraudulent acts” conducted by gaming mogul Kazuo Okada between 2013 and 2015.

The final investigative report, which was disclosed earlier this week, found Mr. Okada to be guilty of three separate fraudulent acts.

The first act occurred between February and March 2015, in which Mr. Okada allegedly instructed Tiger Resort Asia Limited (TRA) to provide a loan of HK$135 million with no collateral and no interest to a company closely linked to Mr. Okada and his family.

It is understood that the funds were used for the payment of artwork which was for personal use.

The investigative report noted that Mr. Okada neither requested prior deliberation by the company nor consulted the company’s Board of Directors and executed the loan on his sole discretion.

The second fraudulent act was allegedly conducted on May 11, 2015 – in which Mr. Okada instructed the person in charge of accounting at TRA to prepare a check in the amount of HK$16 million, which was used to facilitate the gain of Mr. Okada himself.

The third alleged fraudulent act related to the provision of collateral by Universal Entertainment Korea Co. which was used to purchase land for a casino project in South Korea.

In November or December 2013, in order to raise the deposit to purchase the aforementioned land, Mr. Okada borrowed US$80 million through Okada Holdings by providing deposits belonging to Universal Entertainment Korea as collateral.

It is understood that at the time, Yoshinao Negishi, the director and general manager of administration division of the company had repeatedly pointed out that the move would infringe on regulations on Aggravated Breach of Trust. However, Mr. Okada chose to carry out the provision of collateral nonetheless.

“The act by Mr. Okada of making UE Korea carry out the Provision of Collateral can be evaluated as Mr. Okada breaching his duty as a director of the company and UE Korea for the purpose of facilitating the gain of Okada Holdings, and by extension himself, and as causing economic losses of UE Korea,” wrote the report.

Following the report, Universal Entertainment says it will proceed to examine measures to take against Mr. Okada as well as the director and general manager of administration division at the time.

The company also said it will formulate and execute concrete measures to prevent any recurrence of acts such as those committed by Mr. Okada.