Kazuo Okada’s Universal Entertainment has fallen out with one of its Philippine partners.
Reuters reports that Universal terminated an agreement with Century Properties Group under which Century was to invest in the US$2 billion resort casino Universal is licensed to develop at the government-sponsored Entertainment City complex on Manila Bay.
Century officials said Tokyo-based Universal wanted changes in the deal that would have eliminated its exclusive rights to the luxury commercial and residential portions of the project. The company said it would contest the termination.
Universal has investment deals with Century and another Philippines company, First Paramount Holdings 888, that were designed to resolve government charges that it sought to evade compliance with laws restricting foreign ownership of land to no more than 40%.
In 2012, the Philippine Justice Department published a legal opinion indicating the ownership structure of Eagle I Landholdings, Universal’s local affiliate, breached the Constitution because Aruze USA, Universal’s US-based machine gaming supplier, effectively held 64% of Eagle I via direct and indirect stakes.
Century subsequently agreed to acquire 36% of Eagle I as part of a deal that calls for Century to develop five hectares of the Manila Bay site. First Paramount agreed to buy about 24% of Eagle 1. Universal, which maintains that it conducts its Philippines business lawfully, said last year the agreements “create a more favourable situation in response to the land ownership requirements”.
Separately, the US Federal Bureau of Investigation and its Philippine counterpart, the National Bureau of Investigation, are investigating Mr Okada and his companies on suspicions, first reported by Reuters late in 2012, that bribes were paid to secure preferential treatment for Eagle I. Universal and Mr. Okada have denied those allegations and are suing Reuters in Tokyo for defamation.
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