Okada scraps push for directors October 20, 2012 at 3:20 am Tim O’Reiley, LAS VEGAS REVIEW-JOURNAL Kazuo Okada folded his campaign to elect two hand-picked directors to the Wynn Resorts Ltd. board Friday after acknowledging that his legal position made it impossible to win. Simultaneously, he appealed to the Nevada Supreme Court an Oct. 2 lower court ruling turning down his request to vote the 19.6 percent stake in Wynn Resorts, held by his investment vehicle Aruze USA Inc., that was forcibly redeemed in February. Nevertheless, Aruze said in a statement, “We recognize that any relief that may come from the Nevada Supreme Court will not be in time for our independent director nominees to be presented for election at the Nov. 2 annual shareholder meeting.” Three days after the Oct. 2 ruling by Clark County District Judge Elizabeth Gonzalez, Aruze filed with the U.S. Securities and Exchange Commission a preliminary proxy statement framing the looming battle as a need to add voices to the board independent of Chairman and CEO Steve Wynn. However, Aruze noted that the nominations of Yale law professor Jonathan Macey and retired corporate finance executive Frederic Reynolds would be invalid unless he won an appellate victory because only shareholders can put candidates on the ballot. “While we are discontinuing the proxy contest … we will continue to evaluate our options regarding how we may contribute to assuring that Wynn Resorts shareholders are protected from questionable actions by its management and board,” Aruze said in its statement. Aruze declined to comment further. For the time, Okada remains a director but was stripped of the vice chairman’s title last year. Wynn Resorts did not return requests for comment. But in an Oct. 10 proxy supplement, the company called the Okada challenge an “ill-conceived litigation tactic designed to shore up his appeal and does not reflect an interest in the company’s corporate governance.” It further detailed what it deemed misstatements by Okada and revealed that the he has attended less than three-fourths of the board meetings in the past two years. “In a deposition, Mr. Okada stated that he is no longer providing any services as a director of Wynn Resorts because of the litigation.” Although Steve Wynn and Okada were once close business associates – Okada invested $380 million in Wynn Resorts’ predecessor in 2000 and 2002 – they turned into bitter rivals over Okada’s plans to build a massive casino resort in the Philippines. Wynn opposed it as potentially siphoning away wealthy Chinese gamblers from the company’s property in Macau. Early last year, Wynn Resorts commissioned an outside firm headed by former FBI director Louis Freeh to investigate Okada’s activities in the Philippines. The report concluded that he had engaged in “numerous apparent violations of U.S. anti-corruption laws” in trying to win government approvals. The findings prompted Wynn Resorts to declare Okada an “unsuitable” stockholder. This led to the share redemption at a 30 percent discount to market value on Feb. 19 and a subsequent lawsuit by the company to validate the action. Okada’s attorneys have contended that the redemption violated the company’s bylaws, but did not sway Gonzalez in their attempt to vote at the annual meeting. Last year, Okada opened his own front, questioning and voting against Wynn Resorts’ $135 million donation to the University of Macau as an attempt to curry favor with government officials there. The Freeh report, Okada wrote in a Sept. 17 letter to shareholders, “was a mere pretext for the board’s actions to oust a dissenting board member and entrench and enrich Mr. Wynn, the board and the management of Wynn Resorts.” Both sides dispute whether Okada’s conduct in the Philippines could endanger Wynn Resorts’ Nevada gaming license.