A Special Investigation Committee established by Universal Entertainment Corporation last week to investigate an alleged act of fraud involving its Chairman Kazuo Okada has uncovered two more cases of alleged illegal activity.
In a progress report on the investigation released late Monday, Universal revealed “that there is a suspicion that Mr Okada has been involved in yet another two cases of illegal activities separately from the [original] conduct and the Committee decided to subject them to the investigation.”
The first of these originated from a US$80 million bank loan granted to Okada Holdings Ltd – a company entirely owned by Mr Okada and his relatives of which Mr Okada was the only director at the time – in February 2014 for the purchase of land in Korea. Mr Okada then created a security for US$80 million held by Universal Entertainment Korea Co – a wholly-owned sub-subsidiary of Universal Entertainment Corp – at the same financial institution that granted the loan. By the time that security interest was cancelled the following month, Universal Entertainment Korea had already paid US$170,000 in interest that should have been paid by Okada Holdings Limited.
The second case, in May 2015, saw Mr Okada issue a bearer check to the amount of HK$16 million from a bank account under the name of Tiger Resort Asia Limited, a Hong Kong subsidiary of Universal Entertainment Group. Three days later Mr Okada withdrew HK$16 million from a Tiger Resort Asia Limited account based on this check.
“As the series of actions leading up to the withdrawal of the funds described above have been done without necessary internal procedures of the Company, there is a suspicion that they constitute a serious violation of governance,” Universal said.
“The Special Investigation Committee is determined to investigate into these new suspicions in order to clarify the whole picture and to formulate measures to prevent reoccurrence and the Company will continue to provide full cooperation for the investigation by the Special Investigation Committee.”
The Special Investigation Committee had originally been given a 30 June deadline to file its interim report after it was revealed that Mr Okada and Mr Yoshinao Negishi, Director and Head of the Management Division, were suspected of possible fraudulent acts. The original case involved the transfer of around HK$135 million on 20 March 2015 from Tiger Resort Asia Ltd to a third party. HK$130 million was then transferred to Okada Holdings Ltd with the purpose of achieving “personal benefit for Chairman Okada.”
That transfer was uncovered earlier this year by Universal Entertainment’s corporate auditor Mr Nobuyoshi Ichikura and resulted in Mr Okada and Mr Negishi being suspended from all company duties. Mr Okada was removed from the board on Friday.
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