Explainer: Who Is Kazuo Okada and What Exactly Happened During that 'Takeover?'
Philippine business got shook up this week after it was reported that a group led by Okada Manila Resort and Casino founder and former chairman Kazuo Okada conducted an unexpected takeover of the property on Tuesday (May 31).
As reported by various sources, the group, which reportedly comprised business partner Antonio “Tonyboy” Cojuangco, building contractor Dindo Espeleta and lawyer Florencio Herrera III, showed up at the property with about 50 private guards and officers from the Parañaque City Police Department.
A statement issued by Tiger Resort Leisure and Entertainment (TRLEI), which operates Okada Manila, described the takeover as “illegal” and “violent” and employed “brute force and intimidation to compel key legitimate officers to vacate the premises.”
How did it come to this? Who exactly is Kazuo Okada, how was he able to build a sprawling mega casino project in Manila, and why was he removed from the project that bears his name?
Kazuo Okada and Tonyboy Cojuangco in a photo dated 2016. Okada Manila was still under construction
The beginnings of Okada Manila
Okada Manila is the third gaming complex built on reclaimed land now called Entertainment City (the first two were Solaire Resort and Casino of Enrique K. Razon Jr. and City of Dreams Manila, which is a partnership venture of Macau’s Lawrence Ho, Australia’s James Packer, and the SM Group). It occupies 44 hectares of the total 120 hectares of Entertainment City, making it the biggest out of all the locators.
In 2008, the Philippine Amusement and Gaming Corporation (PAGCOR) issued a preliminary license to build the casino resort to Okada, a Japanese businessman who started out repairing broken jukeboxes and then went on to manufacture arcade games for children and pachinko and slot machines for casinos. He founded the company, which was formerly called Aruze Corp. in 1969, but it has since been renamed Universal Entertainment Corp. (UEC)
Pachinko is an enormously popular game in Japan, and for decades, Okada’s UEC was a major supplier to the country’s pachinko gaming industry. Until, in 2000, Okada met Las Vegas casino veteran Steve Wynn, who, at the time, had recently been ousted from Mirage Resorts amid a hostile takeover By MGM Grand.
Okada helped Wynn form a new casino group, Wynn Resorts, and invested $455 million for a fifth of the company, which built Wynn Resorts Las Vegas in 2005 as well as Wynn Macau in 2006.
By the time the Entertainment City project was announced in the mid-2000s, Okada had expressed interest and invited Wynn to co-invest with him here. But Wynn declined, and so Okada decided to go at it alone. Wynn, however, believed the Manila casino resort project was “inappropriate” because it would pose as a direct competition to Wynn Macau. The American casino operator was also concerned the project could put his U.S. gaming license at risk because of perceptions of rampant corruption and lax regulations in the Philippines. This led to Wynn forcing Okada out as Wynn Resorts vice chairman. In February 2012, Wynn Resorts directors also voted to buy back Okada’s equity stake in the company at a 30 percent discount payable over 10 years. The unilateral redemption cost Okada $800 million as his stake had a market value of $2.7 billion at that time.
Okada was also sidelined by reports alleging that he extended generous hospitality benefits to Philippine gaming officials in Wynn hotels in Las Vegas and Macau, as well as an investigation by the Department of Justice and the National Bureau of Investigation for alleged bribery and for violations of the country’s anti-dummy laws to skirt nationality restrictions on land ownership in the Philippines.
A local partner
According to Philippine laws, foreign entities are only allowed to own 40 percent of companies that hold land in the country. This was why it was imperative for Okada to find a local partner for his casino project in the Philippines. Between 2011 and 2014, Okada’s group held talks with some of the country’s largest property developers, including Robinsons Land, Megaworld, and Century Properties, all of which failed.
This was when a common acquaintance introduced Okada to Cojuangco, whose family once controlled PLDT (before selling it to First Pacific Ltd. In 1998). Cojuangco had initially been hesitant about getting involved in casinos.
Cojuangco and Okada
“’I don’t gamble,’ I told my friend,” Cojuangco said in an interview with Forbes Philippines in 2016. “But he said, ‘No, he’s got big plans for the Philippines.’ He started describing what he (Okada) was doing, all his intentions, and that’s when I discovered that we share the same vision. I was all for his opera house, his developing island resorts, developing the airport to bring in the tourists, and I thought, ‘Okay, if those are his plans, then I’ll come in with him.’ Because if it was just a casino, I wouldn’t have come in.”
Okada Manila started partial operations in December 2016. However, by June 2017, Okada was removed from the boards of UEC and its subsidiary Tiger Resort Asia Ltd. following allegations of misappropriation of funds. In August 2018, he was arrested in Hong Kong over corruption-related offenses but he posted bail and even that was withdrawn by the Hong Kong Independent Commission Against Corruption in February 2019. He has since also faced numerous other legal issues related to the shares of his company, as well as maneuverings involving his own family members (he is married with a son and a daughter) that led to him being ousted from Hong Kong-based Okada Holdings, which controls UEC.
Status Quo Ante Order
Back in the Philippines, Okada moved to reclaim his position as chairman and CEO of TRLEI. On May 4, 2022, the Supreme Court issued a Status Quo Ante Order that directed TRLEI to “MAINTAIN THE STATUS QUO prevailing prior to petitioner’s removal as stockholder, director, chairman and CEO of Tiger Resort Leisure and Entertainment, Inc. (TRLEI) in 2017.”
It was this order that Okada’s group brandished when it arrived at Okada Manila on May 31. According to a statement from PAGCOR, the team from the former management of TRLEI arrived at Okada Manila at around 9:45 a.m. “headed by Mr. Antonio Cojuangco and Mr. Dindo Espeleta, accompanied by Atty. Herrera, members of the Philippine National Police and Sheriff from the Supreme Court.
“They proceeded immediately to the Hotel’s office to meet Mr. Hajima Tokuda. The Sheriff served the Supreme Court Status Quo Ante Order to Mr. Tokuda. Atty. Herrera informed Mr. Tokuda that based on the SQAO, Mr. Kazuo Okada was restored as Chairman and CEO of TRLEI. He then formally introduced the group of Mr. Kazuo Okada (who was present at that time thru zoom conference). The video conference ended at around 12:10 PM.
“The PAGCOR Monitoring Team on duty at that time reported that Mr. Tokuda was then escorted outside the premises without being bodily hurt. The whole incident was covered by Close Circuit Television (CCTV) cameras.”
But if you ask the side of TRLEI, that’s not how it happened. “…the interlopers have kidnapped Mr Hajime Tokuda and as of this time brought him out of the hotel. In the process, they also harmed and caused serious injuries against the other officers of the company, and their lawyers who were present.”
TRLEI had already filed an urgent motion for reconsideration of the Supreme Court order.
“The removal of Mr Okada was valid and legal and done upon the instructions of its parent company Tiger Resort Asia Limited (TRAL), which owns 99.99 percent of TRLEI,” the TRLEI statement read. “TRAL, which is a Hong Kong company, is not under the jurisdiction of Philippine courts nor subject to the SQAO [Status Quo Ante Order]. Further, TRLEI is indirectly wholly owned by Universal Entertainment Corporation (UEC), a Japanese publicly listed company. The Tokyo District Court, Tokyo High Court and Japanese Supreme Court have already effectively decided with finality that Mr Okada’s removal was valid. UEC, TRAL and TRLEI are confident that the Philippine Supreme Court will eventually see the correctness of TRLEI’s position, rule in TRLEI’s favor, and recognize the Japanese courts’ decisions on the dispute between Japanese citizens over the control of the Japanese parent of TRLEI and its subsidiaries.”
However, a legal expert quoted by gaming news platform Inside Asian Gaming said that the SC decision was clear in its order for Okada to “return to his board seat and position as CEO with TRLEI when he was evicted by the other group.
“What it means for TRLEI is that they need to comply with the Supreme Court’s order for the reinstatement of Okada. They can opt to file a Motion for Reconsideration but the Supreme Court rarely reverses itself and the reinstatement is likely inevitable.”
As of Thursday, June 2, UEC said that it intends to file criminal charges against those involved in the May 31 takeover of Okada Manila.
In the meantime, the group led by Okada and Cojuangco has said that it’s business as usual at Okada Manila, so if you’re thinking of visiting the property, we see no reason why you shouldn’t.