(Bloomberg) -- Japanese gaming tycoon Kazuo Okada was briefly detained in the Philippines for coercion related to his occupation of a Manila casino owned by Universal Entertainment Corp. The arrest boosted Universal’s shares on optimism the company may have the upper hand in the long-running dispute between Okada and the firm he used to run.
Okada said he was detained upon returning to the Philippines, but was immediately released after posting bail on Monday. Tokyo-listed Universal Entertainment said separately that Okada was arrested at the Manila airport after he landed from Japan. Okada and his associates are accused of alleged coercion when his men physically took over the Okada Manila resort on May 31 after the Philippine Supreme Court reinstated him as chairman of the casino’s Philippine operator.
“His arrest provided optimism that this chaos will come to an end soon, casino operation will return to normal, and the company’s earnings will recover,” said Jun Kitazawa, deputy manager of investment information at Miki Securities Co. “Physical occupation of the casino by Okada and his associates was creating uncertainty for investors.”
Okada’s arrest on Monday is the latest twist in the corporate dispute at pachinko-slot operator Universal Entertainment, which the tycoon founded. He was ousted from the company in 2017 on suspicion of misappropriating funds. The departure sparked a tug-of-war on who will manage Universal’s casino in the Philippines, an integrated resort called Okada Manila. Okada was reinstated as chairman of the Okada Manila’s operator, Tiger Resort Leisure & Entertainment, following the Philippine Supreme Court’s status quo order.
Okada Manila is aiming to go public through a merger with a special purpose acquisition company led by former casino analyst Jason Ader. The property was valued at $2.6 billion including debt as of October 2021 when the deal was announced.
Okada was ordered by a Manila trial court to hear the charges against him later this month, Universal Entertainment said in a statement.
In a statement, Okada, who is still in the Philippines, said he will be able to prove that he’s the rightful and beneficial owner of Okada Manila. He called the arrest a “brief inconvenience.”
“I am confident that the legal process within the Philippine courts system will vindicate us in all the cases filed against me and my business associates.”
Shares of Universal Entertainment jumped as much as 14% in Tokyo trading Wednesday.
“The arrest shows Universal Entertainment is in control for now but this tussle is far from over,” says Astro del Castillo, managing director at First Grade Finance. “The ownership dispute should be a red flag for investors but some are looking beyond that because the casino is profitable.”
(Updates to say Okada Manila is planning to go public in fifth paragraph)
©2022 Bloomberg L.P.
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