Okada, 24 others face anti-dummy raps in PH

MANILA, Philippines (3rd UPDATE/CORRECTED) – Japanese pachinko billionaire Kazuo Okada and 24 Filipino officials, lawyers and Japanese casino executives are facing charges over possible violations of the Anti-Dummy Law in the Philippines.

This stemmed from the 2007 approval by Philippine Amusement and Gaming Corp (Pagcor) of the controversial project in Entertainment City in Pasay City. Okada was one of the 4 groups who received licenses under former Pagcor chief Ephraim Genuino to operate casino-entertainment projects in the sprawling area meant to put the Philippines in the Asian gambling map.

Read: Ex-Pagcor chief has links to Okada’s Philippine ventures: report

On Monday, July 15, the Department of Justice (DOJ) announced it has recommended the filing of charges against Universal Entertainment founder and chair Okada, 8 more Japanese executives, and 16 Filipinos for making it appear that the Okada group qualified to acquire the land where its US$2-billion Manila Bay Resorts project will be located. (Editors’ note: We earlier reported based on a press statement that 26 individuals face anti-dummy suits, including 17 Filipinos. The DOJ document only listed 16 Filipinos. We are sorry.)

The Filipino respondents included ex Pagcor consultant Rodolfo Soriano and and the lawyers from SyCip Salazar Hernandez and Gatmaitan law firm. The list does not include Genuino.

The Philippine Constitution bars foreigners from owning land or owning over 40% in an entity that owns a land. The Anti-Dummy Law (or Commonwealth Act No. 108, as amended) was born to spell out how Filipinos are punished when they participate in evading the nationalization laws. The Anti-Dummy Las also prohibits foreigners from intervening in the management, operation, administration, or control of any nationalized activity.

Anti-dummy charges

The DOJ investigating panel found that Okada-led and Japan-headquartered Universal Entertainment allegedly worked with the SyCip Salazar Hernandez and Gatmaitan Law firm, a well-known firm in Manila, to establish 3 dummy companies.

“It can be concluded that right from the beginning, Universal is behind the operations of the 3 corporations…The synthesis of the different components of these corporations had clearly established that the resources which fueled the operations of the corporations under investigation actually came from Universal,” the DOJ said.

The companies — Eagle 1 Landholdings Inc, Eagle 2 HoldCo Inc at Tiger Resort Leisure and Entertainment — were the entities that dealt with Pagcor, then headed by former chair Genuino, for the licenses the Okada group needed to develop its Manila casino project.

The DOJ panel, however, noted that over time, the original shares of the 3 companies were transferred to a Netherlands-registered Molly Investments Corp.

To make Molly Investments appear still 60% Filipino-owned, its shareholders included Lex Development Corp and Platinum Gaming and Entertainment Corp., both Filipino-owned. In a testimony before the DOJ panel, a certain Rene Soriano and Llewellyn Llanillo stressed that Lex Development is owned by Sycip Salazar law firm.

Previously, local law firm M. M. Lazaro and Associates told American investigators that “Mr. Okada caused various legal entities to be incorporated in the Philippines, in order to develop his casino resort project there, over time replacing the original incorporating Filipino shareholders with combinations of foreign shareholders affiliated with or controlled by him and associates of then-Pagcor chairman Genuino.”

Lazaro and Associates were tapped by Freeh Sprokin & Sullivan LLP led by a former Federal Bureau of Investigation official investigating Okada’s Philippine transactions. Louis Freeh was hired by Las Vegas-based Steve Wynn, Okada’s American partner-turned-bitter rival.

The Wynn board used the “Freeh” report prepared by a former US Federal Bureau Investigation (FBI) chief to oust Okada from the Wynn Resort board. 

The DOJ recommended charges to be filed against the following individuals:

1. Imelda A. Manguiat
2. Jose Ma. G. Hofileña
3. Hector M. de Leon Jr.
4. Ramon G. Songco
5. Carina C. Laforteza
6. Rene Y. Soriano
7. Andres B. Sta. Maria
8. Roberto C. San Juan
9. Jan Celine Abaño
10. Maria Inez C. Togle
11. Manuel N. Camacho
12. Paulo N. Bombase
13. Rodolfo V. Soriano Jr.
14. Roberto A. Suson
15. Lourdes S. Go
16. Victor Emmanuel C. Caindic
17. Hajime Tokuda
18. Manabu Kawasaki
19. Masato Araki
20. Koki Seki
21. Takeshi Nojima
22. Tetsutaro Shibata
23. Ken Taura
24. Mitsuo Hida
25. Kazuo Okada

Aside from the 25 individuals, 10 companies also found liable were:

1. Eagle 1 Landholdings inc
2. Eagle 2 Holdco Inc
3. Tiger Resory Leisure and Entertainment Inc
4. Universal Entertainment Inc (Japan based company)
5. Molly investments CooperAtive UA
6. Aruze USA Inc (affiliate of Universal, American registered corp)
7. Future Fortune Limited (Hongkong based, affiliate of Universal)
8. Lex Devt Corp (allegedly owned by Sycip law Firm)
9. Ultralex Holdimgs Corp
10. Platinum Gaming and Entertainment Corp

SyCip’s statement

In a statement issued by its managing partner, Rafael Morales, SyCip Salazar Hernandez & Gatmaitan said: “We take exception, in the strongest possible terms, to the NBI Investigating Panel’s resolution recommending the inclusion of several lawyers of SyCip Salazar Hernandez & Gatmaitan in the prosecution of Mr. Kazuo Okada in connection with his Philippine investments.”

The firm added that its lawyers “have, at all times, acted in full compliance with all laws applicable to the transactions in which they were involved. Those transactions were legitimate and lawful and we are confident that a proper investigation will clear our lawyers of any wrongdoing.”

The rift between Wynn and Okada has triggered several cases filed against each other. 

One of the recent cases involved the Nevada gaming board, which was assisted by the Philippines’ National Bureau of Investigation (NBI). They were tying to establish a money trail for some US$40 million alleged illegal payment by Okada’s Universal Entertainment in the US to Philippine officials.

The alleged bribery was reportedly over tax grants for the Okada group sometime in 2010, also under Genuino’s watch.

Read: Pagcor probes Okada ‘payment’ to ex-consultant

Okada had said findings of a 3rd party it had commissioned to investigate the bribery charges highlighted governance problems or an internal “mistake.” Universal said in a June statement the funds were not meant to a bribe Philippine officials. 

The legal cases hounding Okada have hurt him and his business. South Korea recently rejected Okada’s casino bid in Seoul, while the group of Filipino tycoon John Gokongwei Jr., has recently decided not to pursue their retail partnership with the Okada group for the Entertainment City project. – Rappler.com