A special investigation committee set up by Japanese gaming conglomerate Universal Entertainment Corp to probe several dealings involving company founder Kazuo Okada (pictured) has yet to complete its investigations.
The announcement was made by Universal Entertainment in its latest results announcement, filed on Monday.
“Since the special investigation committee has not submitted a report, no facts have been confirmed that can be used for determining any effects of the alleged improper activities,” Universal Entertainment stated.
The firm added: “The purpose of forming this committee is to perform thorough and objective examinations using professional skills in order to determine all facts involving this matter and to implement preventive measures. The committee is currently conducting examinations based on these objectives.”
The Japanese conglomerate announced in early June that it had established an internal investigative panel to probe Mr Okada’s use of company money. Universal Entertainment said it had found three cases in which Mr Okada is suspected of misappropriating company funds.
The Japanese firm said on June 8 that it had suspended the leadership powers held by Mr Okada, accusing him of “a serious violation of governance”.
Mr Okada has described Universal Entertainment’s allegations as “nonsense”. Reuters quoted the businessman as saying that one of the suspected transactions was a loan – not due until November – that had been used to expand junket operations at the Okada Manila casino resort in the Philippines.
Universal Entertainment controls the Philippine property via Tiger Resort, Leisure and Entertainment Inc. The latter company announced on June 16 it had removed Mr Okada as company chairman.
Universal Entertainment has since elected a new board of directors that excludes Mr Okada.
In its Monday filing, Universal Entertainment stated it expected the cases involving Mr Okada to “have no effect on the [firm’s] consolidated financial statements”, as the company expected to be able to recover any money allegedly misused.
The Nevada Gaming Control Board in the United States confirmed to GGRAsia in June that it was also investigating the reports of alleged misuse of company money by Mr Okada. Diane Presson, supervisor at the regulator’s investigations division, said at the time that the Nevada Gaming Control Board was “investigating the allegations based on Mr Okada and affiliated companies, Aruze USA Inc, Aruze Gaming America Inc, and Universal Entertainment holding various gaming licences in Nevada”.
On Monday, Universal Entertainment – which currently makes most of its money via the sale of pachinko gaming equipment for the Japan market – announced its results for the three months ended June 30. The firm posted a net loss for the period of JPY6.79 billion (US$61.3 million) compared with net income of JPY6.89 billion in the prior-year period. Net sales decreased by 46.1 percent to JPY10.99 billion, mainly impacted by lower business volumes in the pachinko and pachislot segment, said the company.
Universal Entertainment did not disclose detailed quarterly data for its gaming operations at Okada Manila.
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”We expect Okada [Manila] to add US$1.2 billion of GGR by 2019 to the overall market, capturing 32 percent market share”
Alex Poon and Praveen Choudhary
Analysts at Morgan Stanley