Japan’s Supreme Court rejected the latest appeal against Universal Entertainment Corporation lodged by Kazuo Okada, the company’s co-founder, who formerly also chaired its Board of Directors. The corporation confirmed the dismissal of Okada’s final appeal in a recent statement. The Japanese slot, arcade, and pachinko machines manufacturer filed a lawsuit against its co-founder and former chair, accusing him of illicit financial transactions that resulted in damages for the corporation.
Last year, Universal Entertainment won a legal battle against Okada after Tokyo’s District Court ruled in the company’s favor and ordered the Japanese businessman to pay ¥21.3 million (approximately US$193,000) in damages. The former chairman of Universal originally appealed the court decision from February 2020 ordering him to cover the damages and pay all litigation costs on top of a 5% annual interest backdated to December 2017.
After the court dismissed Okada’s initial appeal, the billionaire businessman filed another one in September 2020 only to have it rejected again. The lawsuit, which dates back to November 2017, was filed after an internal investigation established the former Chairman had been involved in three separate instances of financial mismanagement.
Universal Accused Okada of Neglecting His Chairman Duties
At the time, the company accused Okada of neglecting his duties as Chairman and announced it was to seek compensation for the financial damages it suffered as a result of his misconduct. Universal is the parent organization of Okada Manila’s Tiger Resort, Leisure, and Entertainment Inc. in the Philippine capital.
According to the company’s lawsuit, Mr. Okada made arrangements for Universal Entertainment’s Hong Kong subsidiary Tiger Resorts Asia Limited to loan him HK$135 million (US$ 17.3 million) for personal use back in 2015. Furthermore, the loan came with no interest rates as Universal claimed in its lawsuit.
Another act of misconduct on behalf of Mr. Okada was to procure a check valued at HK$16 million without authorization from Tiger Resort Asia Limited. Universal stated in the lawsuit Mr. Okada withdrew the funds without complying with the company’s established internal procedures.
Finally, the corporation claimed the former Chairman changed the business entity that was to purchase land required for the construction of an integrated resort in South Korea. The land was to be purchased by UE Korea, a subsidiary of Tiger Resort Asia. However, Mr. Okada transferred the purchase to Okada Holdings Limited, a company which he fully owns.
The transfer resulted in Okada Holdings Limited borrowing US$80 million from UE Korea to make the purchase. The Korean subsidiary then had to pay a management consultancy charge to the amount of US$173,562. The consultancy fee coincided with the loan’s interest fee.
A shareholder vote from June 2017 resulted in Mr. Okada stepping down from the position of Universal Entertainment Chairmen and his subsequent ousting from the company’s Board of Directors. According to Universal’s official statement, the decision of the Supreme Court was final. It also dismissed a lawsuit lodged by Mr. Okada against the company accusing it of defamation of character.