The founder and CEO of Wynn Resorts Ltd. has responded to a lawsuit filed against his company by its then-largest shareholder with a suit of his own. In a lawsuit filed on Feb. 19, billionaire Las Vegas casino mogul Steve Wynn is accusing the shareholder of using the Wynn name for his own ends and of violating federal anti-corruption laws. Meanwhile, Wynn has forcibly repurchased the plaintiff's stock at a steep discount.
We previously discussed the increasingly complex litigation between Wynn and the shareholder, the owner of a Japanese pachinko machine manufacturing company, in our Feb. 15 blog post. The former shareholder, who also sat on the board of directors, filed the suit after he claimed the company would not let him examine documents related to a $135 million donation pledged to the University of Macau. The last portion of the donation is due in 2022, the year that the Wynn Macau casino's gaming license expires.
The new lawsuit says that the Japanese man is the one who has acted improperly. In the suit, Wynn accuses the board member of planting employees as interns at Wynn Macau to learn the company's business secrets and apply that "know-how" to his own company, Universal Entertainment.
In a statement, Wynn also accused the board member of corruption without going into details. The statement cited an internal investigation led by former FBI Director Louis Freeh that reportedly uncovered dozens of incidents that were "in apparent violation of U.S. anti-corruption laws" over the past three years.
In response, an email from Universal called the lawsuit and the stock buyback cover for Wynn's goal of removing the Japanese partner from influence. The pair have been feuding since the board member began pursuing gaming interests in the Philippines. He arranged a meeting between Wynn and Philippine President Benigno Aquino in February 2011, but Wynn refused to attend, forcing the board member to cancel.
Source: Reuters, "Wynn gives U.S. report as Okada battle grows," Aruna Viswanatha and Farah Master, Feb. 21, 2012