Japanese gaming mogul Kazuo Okada and an associate have been arrested by Hong Kong’s anti-corruption watchdog, according to a filing from Universal Entertainment Corp.
According to local media reports, Okada and his associate, Li Jian, have been held by the Hong Kong Independent Commission Against Corruption (ICAC) for conspiracy to defraud Okada Holdings of $19.7 million, based on a complaint filed by Tiger Resort Asia Ltd.
TRA had accused Okada of releasing corporate funds as loans to Li Jian’s Goldluck Tech Ltd without demanding collateral and interest between February and March 2015.
Okada then allegedly collected the loan payment for his own personal use and paid Li for his involvement in the scheme.
It is understood that Mr. Okada is currently released subject to bail conditions imposed on him by the ICAC.
Okada is a former chairman of Universal Entertainment but had resigned from the post on June 29, 2017.
In September 2017, Universal Entertainment Corp said it found Okada guilty of three separate fraudulent acts.
The first act occurred between February and March 2015, in which Mr. Okada allegedly instructed Tiger Resort Asia Limited (TRA) to provide a loan of HK$135 million with no collateral and no interest to a company closely linked to Mr. Okada and his family.
It is understood that the funds were used for the payment of artwork which was for personal use.
The investigative report noted that Mr. Okada neither requested prior deliberation by the company nor consulted the company’s Board of Directors and executed the loan on his sole discretion.
The second fraudulent act was allegedly conducted on May 11, 2015 – in which Mr. Okada instructed the person in charge of accounting at TRA to prepare a check in the amount of HK$16 million, which was used to facilitate the gain of Mr. Okada himself.
The third alleged fraudulent act related to the provision of collateral by Universal Entertainment Korea Co. which was used to purchase land for a casino project in South Korea.
In November or December 2013, in order to raise the deposit to purchase the aforementioned land, Mr. Okada borrowed US$80 million through Okada Holdings by providing deposits belonging to Universal Entertainment Korea as collateral.
Earlier this year, Universal Entertainment filed civil and criminal complaints against Okada claiming its patent rights were violated and sought compensation.
The gaming mogul is also under investigation from the Philippines Department of Justice for $10 million fraud charges filed against him.
Universal said it will render its full support and assistance to the ICAC and other law enforcement authorities should the situation require.