Japanese gaming tycoon Kazuo Okada has lost control over the Philippines’ largest hotel-casino, the Okada Manila Resort in Parañaque City, to a group that includes his wife Takako Okada and local businessman Antonio “Tonyboy” Cojuangco.
This was after the Supreme Court lifted the status quo ante order (SQAO) it issued in April 2022, which Okada used as basis to regain ownership of Tiger Resort Leisure and Entertainment Inc. (TRLEI), the company that operates the gaming establishment.
Opened in December 2016 at a cost of over US$2.4 billion, Okada Manila is spread over 44 hectares in Paranaque’s Entertainment City, features 993 five-star hotel rooms, and has over 284,000 square feet of gaming space.
In a 14-page decision released Tuesday, the SC’s First Division ruled that Kazuo’s complaint that was elevated before the high court,following its dismissal by the Regional Trial Court of Paranaque City on November 16, 2018 and the Court of Appeals on September 24, 2020, was an election contest and has since prescribed.
The high court stressed that the complaint was filed more than a yearafter the 15-day reglementary period under the Interim Rules ofProcedure for Intra-Corporate Controversies.
“The records show, however, that the complaint was filed on August 29,2018, or more than one year after the conduct of the June 16, 2017 special stockholders’ meeting where the elections for the removal and the replacement of Kazuo Okada as director, chairperson, and CEO (chief executive officer) of TRLEI were held,” the SC said in a resolution dated Nov. 13, 2023.
“Clearly, the complaint was filed beyond the 15-day prescriptive period for election contests. Consequently, the CA did not err in characterizing Kazuo’s complaint as an election contest in its Decision dated September 24, 2020. The CA properly affirmed the RTC’s dismissal of the complaint on the ground of prescription,” it added.
The SC also held that even if the complaint would be treated as a case for reconveyance of shares of stocks, its dismissal is still warranted due to lack of basis.
According to the tribunal, Kazuo Okada was merely a nominal shareholder in TRLEI and had no control over Okada Holdings Limited (OHL) and its subsidiaries.
The high tribunal said this was established by the evidence submitted to the CA, which was tasked by the SC to look into Okada’s ownership dispute.
The high court noted that the CA was able to verify that the one share registered in the name of Kazuo Okada reflected in the TRLEI’s General Information Sheet (GIS) as of May 2017 was merely a nominal share under the TRAL deed of assignment.
However, the TRAL deed of assignment had been revoked by Tiger Resort Asia Limited (TRAL) in June 2019, which resulted in the cancellation of Kazuo’s stock certificate in TRLEI.
“On the other hand, Kazuo failed to prove that he was indeed the owner of the subject share. Thus, there are no shares of stock in TRLEI that Kazuo can legally and properly recover in this case,” the tribunal said.
Kazuo Okada filed a complaint for Declaration of Nullity of Removal as a Stockholder, Director, and Officer and Reinstatement as a Stockholder, Director and Officer (Complaint) before the Paranaque RTC City on August 29, 2018 against TRLEI and its directors Manuel Lazaro, Kenji, Sugiyama, Wolstenholme, Antonio Cojuangco, Reynaldo David, Yoshinao Negishi, and TRAL and its directors Kenshi Asano and Takako Okada.
The gaming tycoon alleged that his removal as stockholder, director, chairperson, and CEO of TRLEI was void for being. without authority and in violation of Section 28 of the Corporation Code.
Kazuo asked the court that it declare null and void ab initio his removal as stockholder, director, chairperson, and CEO of TRLEI, and reinstating him to these positions.
He insisted that his complaint was not an election contest because his unlawful ouster as a stockholder of TRLEI was integral to his subsequent void removal as director, chairperson, and CEO.
After the trial court and the CA junked his complaint, Kazuo sought redress from the SC, which issued an SQAO pending the resolution of the appeals court’s study of the evidence in connection with Okada’s ownership.
The status quo ante order directed all parties in the case to observe status quo prevailing prior to Kazuo’s removal as an official of TRLEI.
The Court said the SQAO “is meant only to preserve Kazuo’s right as a beneficial owner of TRLEI during the pendency of the main case.”
“Given this Court’s resolution on the main petition, the SQAO must consequently be lifted,” the SC declared.
In August 2022, the SC referred the case to the CA for the reception of evidence on the factual matters related to the ownership dispute.
Among the evidence the CA was tasked to receive were the propriety of maintaining the SQAO in view of alleged developments in TRLEI following Kazuo’s ouster, specifically, its financial condition and the alleged dissipation of its assets;
The supposed nonpayment of landlord, suppliers and contractors; TRLEI alleged intention to list Okada Manila International Inc., (OMI) in the United States; TRLEI’s purported plan to transfer its casino business permit to OMI;
The supposed waiver of TRLEI’s leasehold rights over the land on which Okada Manila is situated; and other acts claimed to be ultra vires (beyond the powers) and prejudicial to TRLEI.
The CA was tasked to determine the existence, authenticity, and accuracy of the translations of purported decisions of the Japanese and Hong Kong courts which allegedly effectively ruled that Kazuo has no control over OHL, the ultimate parent company of TRLEI, OMI, TRAL, and UEC (Universal Entertainment Corp.), and as such, limit Kazuo’s ability to influence and control the affairs of TRLEI.
“To aid this Court in resolving the matters raised by the parties in relation to the issuance of the SQAO, we deem it proper to refer the pending factual issues to the CA for its determination,” the SC said.
The Court stressed that “disruption was never the intent of the SQAO.”
Several TRLEI officers who were forcibly removed from their posts during Okada’s takeover have filed criminal charges against the business tycoon and several other individuals for kidnapping, serious illegal detention, grave coercion, and unjust vexation.