Disclaimer: I really have no idea what I'm talking about. For all I know, Okada is a lunatic and Wynn Resorts are protecting themselves from a madman with some sort of hidden agenda. Still, for the purposes of this post, let's assume he's a reasonable, successful businessman that's a bit weirded out that a company he owns 20% of is being secretive about their finances.
Well, I guess he's not gonna be chairman anytime soon.
Today we learned that Kazuo Okada, the largest individual shareholder in Wynn Resorts and a board member, is suing the company (SEC document). Why? He questioned a few of the company's large financial transactions and wanted to examine the books. The company said no. He believes that his shares, and probably more importantly his place on the board, gives him the fiduciary bonafides he needs to get that access.
The way the suit reads, Okada was against a $135 million donation to the University of Macau. He objected. The board didn't listen and went ahead anyway and from what I can tell, that set him off.
He wants the details on that transaction, wants to know where a $120 million he invested in the company in 2002 went (supposedly earmarked for Macau development ; the company at first claimed they didn't know he invested it - not confidence inspiring) and additional details on the amended shareholder agreement that went through after Steve and Elaine Wynn divorced in 2010 (the agreement split the ownership but effectively left the voting control with Steve).
What would one find if they examined the books of the pre-public company? Well, we have no idea... but I don't think it would be a surprise to see some lavish spending on executive travel to Macau, office suites and the like. Maybe something more juicy? Maybe, uh, 'gifts' to government officials in China? Without any details, we can't judge but something about that time period has Okada at least curious... Maybe there's some potential for embarrassment if some of this comes out? Who knows.
As far as the Macau University donation goes, given the term of the payments and them coinciding with the current expiration of Wynn's concession in 2022, I can't help but wonder if this 'civic good' is at least partially motivated by that renewal process. From what we're told in these documents, a donation of that size was unprecedented... and as far as I know, none of Wynn's kids want to go to school there (the Steve Wynn Center for Gaming Research? Paging Dr. Dave).
Why would the company say no? Either there's something in there they don't want to share or they simply don't believe the request is legitimate... but given that it's now a public spectacle, there has to be more to it. Perhaps the relationship between Okada and Wynn has completely broken down?
For Okada to go to court against a company where his investment is worth over a billion dollars, he had to be really pissed. How could this impact future gaming expansion in Japan, where Okada's partnership was seen as giving Wynn Resorts a powerful leg up? One thing for sure: this will be something to watch.
Update: Wynn Resorts responded today with a strongly worded press release suggesting that Okada's request was without merit and pointed to a potential falling out between Okada and the board over his participation in a casino project in the Philippines.