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Wynn Resorts forcibly buys out board member

Source: Thomson Reuters Foundation - Sun, 19 Feb 2012 05:22 PM
Author: Reuters
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 (Adds details on buyout) 

   NEW YORK, Feb 19 (Reuters) - Wynn Resorts Ltd <WYNN.O> said it had discovered that board member Kazuo Okada made improper payments to foreign gaming regulators and the company forcibly bought back the Japanese gaming mogul's 20 percent stake in Wynn. 

   Okada was found to be "unsuitable" and was asked to resign as a director of Wynn Resorts, the company said. 

   Wynn will also recommend that Okada be removed as a director from the board of its Hong Kong subsidiary, Wynn Macau Ltd.  

   The company bought back Okada's 24 million shares, worth $2.7 billion based on Friday's closing price of $112.69.  

   It promised to pay him $1.9 billion in 10 years via a promissory note paying annual interest of 2 percent.  

   Wynn said the move came after a year-long investigation of Okada that uncovered more than three dozen instances over a three-year period in which Okada and his associates engaged in "improper activities for their own benefit in apparent violation of U.S. anti-corruption laws," including cash payments and gifts totaling about $110,000 to foreign gaming regulators.  

   Wynn Resorts' compliance committee engaged several investigators, including a former director of the U.S. Federal Bureau of Investigation, after receiving an independent report detailing numerous apparent violations of the U.S. Foreign Corrupt Practices Act by Aruze USA Inc, its parent company Universal Entertainment Corp <6425.OS>, and its principal shareholder, Okada.  

   Wynn also filed a lawsuit against those same parties for breach of fiduciary duty and related offenses. 

 (Reporting By Martinne Geller in New York; Editing by Maureen Bavdek) 

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