Wynn asks judge to oppose top investor's suit

Wynn asks judge to oppose top investor's suit
By Farah Master

(Reuters) - Las Vegas tycoon Steve Wynn's Wynn Resorts has urged a U.S. court to reject legal claims made by its largest shareholder, adding fire to an escalating public spat that could impact the future control of the $15 billion casino giant.

In a 117-page filing with the Clark County District Court in Nevada, Wynn stated that Kazuo Okada, who holds a 20 percent stake in the firm, was "utilizing innuendo, hyperbole, half-truths and sweeping generalizations" in his legal petition that was filed on January 11.

Okada, Wynn's longtime business partner who was formerly known for his close relationship with the U.S. billionaire, sued the company for denying him access to crucial financial information and has objected to an "inappropriate" $135 million company donation to the University of Macau.

The Japanese businessman owns more than double the stake of Wynn Resorts stock than Wynn himself has. Okada filed his suit through Aruze USA Inc -- a unit of his company Universal Entertainment Corp, an arcade-game manufacturer and developer of a multi-billion-dollar casino in the Philippines.

Responding in Monday's filing in Nevada, Wynn stated that Nevada law did not give Okada the right to inspection and his requests were "nothing more than stockholder inspection requests, on behalf of Aruze."

"Nevada law does not afford Okada or any other individual director the right to do an end run around the express statutory limitations on stockholder inspection rights, or to play detective, while unnecessarily distracting and burdening Wynn's management with the endless task of satisfying his unfounded and unarticulated 'concerns'," the filing said.

Wynn's donation to the University of Macau in 2011 was approved by the boards of Wynn Resorts and Wynn Macau on April 18 last year, with Okada the only member of the 12-person board who objected to the payment, according to the latest filing.

OKADA FIRES BACK

In an email sent to Reuters on Tuesday, Aruze USA said that as a member of the board of Wynn Resorts, Okada had the right to inspect the corporate documents he deemed necessary to carry out his duties as a director.

"The response of Wynn Resorts' management, while full of colorful rhetoric, cannot explain this away. We look forward to presenting our position to the Court," Aruze said.

Okada, a Hong Kong resident who made his fortune in Japanese pachinkos, has also proposed four potential candidates for election ahead of Wynn's 2012 shareholder meeting.

If these are endorsed, the Japanese businessman would be pushing out high level executives including Wynn's Chief Operating Officer Marc Schorr and Linda Chen, President of Wynn International Marketing, whose terms expire this year.

Wynn, creator of the volcano-roaring Mirage and lavish Bellagio in Las Vegas, upset shareholders more than 12 years ago with overzealous spending on items including his $200 million art collection, eating into profitability of his firm at the time, Mirage Resorts.

Weighed by poor company earnings, Wynn agreed to sell out to MGM Grand, now known as MGM Resorts International in 2000, before rebounding on the gaming stage with Wynn Resorts.

ASIA EXPANSION THREATENED?

Wynn, like Las Vegas and Macau rival Sheldon Adelson of Las Vegas Sands, has expressed interest in cementing his presence in emerging Asian gaming markets such as Japan and South Korea should legalization allow in the future.

Okada, who has been investing in Wynn Resorts since 2000, is seen as key to the company's potential casino development in Japan due to his vast business links and contacts.

The earthquake and tsunami-ravaged country has been discussing legalizing casinos to help contribute to international tourism. Japan is a market that analysts say would be highly lucrative and could generate revenues of over $40 billion a year.

"The negative relationship dynamics that have developed seem serious enough to where it may put the company's future in Japan in jeopardy," said Jonathan Galaviz, managing director and chief economist at research firm Galaviz & Company.

"My guess is that this negative relationship issue with Wynn Resorts will probably press Okada to develop a relationship with another U.S. casino gaming company. Certainly Las Vegas Sands has been very aggressive in their desire to do something in Japan," said Galaviz, adding that he expected many large corporates to be reaching out to Okada's organization.

Revenues from Wynn's property in Macau, the world's largest gambling destination on the tip of China's southern coast, accounts for 70 percent of Wynn Resort's total revenues. Wynn currently does not have a presence in the fast-growing Singapore market, where LVS has developed one of the world's most profitable casinos.

(Editing by Brian Rhoads and Muralikumar Anantharaman)