In a final split with Wynn Resorts Ltd., WYNN -0.88%Japanese businessman Kazuo Okada said Thursday he would resign effective immediately from the board of the casino giant he helped to found with Steve Wynn.
The announcement came one day before Wynn Resorts had a vote scheduled among shareholders to remove Mr. Okada from the board. The company alleged that Mr. Okada had committed improper business dealings and would be a detriment to Wynn as it applies for licenses in new jurisdictions.
Mr. Okada denies the accusations and had been fighting Wynn's attempt to force him from the board. But he faced long odds as he lost a motion in a federal court in Nevada last week to stop the process. Prominent proxy advisory firms have also recommended that shareholders vote out Mr. Okada.
Wynn Resorts said in a statement that preliminary results showed 99.7% of the shares voted to date were in favor of Mr. Okada's removal from the board.
"It is with great reluctance and a broken heart that Mr. Okada decides to resign from the board," Mr. Okada's attorney, Marc Sonnenfeld, said Thursday.
The move cuts Mr. Okada's last official tie with the casino giant, but he still remains a major creditor and is owed $1.9 billion from the company.
Mr. Sonnenfeld said the protracted legal dispute between Mr. Okada and the company would continue. A year ago the board stripped Mr. Okada of his shares and voted to repay him, at a 30% discount, in 10 years' time. At that time Mr. Okada had owned around 20% of the company.
Wynn Resorts has said it was required to make the move under its articles of incorporation after a private investigation for the company found Mr. Okada had made improper payments to public officials in the Philippines, where he is building a casino.
Mr. Okada denied the allegations. He is asking a court to rule that the move by Wynn was illegal and that the company sharply undervalued his stake. His claims and charges from Wynn are due to go to trial next year in a Nevada state court.
Mr. Okada has said that a board acting under the direction of Mr. Wynn, the casino giant's chief executive, targeted him unfairly for speaking out against what he alleges is the company's own corrupt practices in the Chinese gambling enclave of Macau, where Wynn owns casinos. Wynn denies the allegations and recently said that the Nevada Gaming Control Board, which had investigated Mr. Okada's charges, had closed its investigation without finding wrongdoing. The company in December said it was revamping its board in a shift toward more independent directors and was seeking Mr. Okada's removal from the board.
On Thursday, in a four-page statement, Mr. Okada expanded on his accusations against Mr. Wynn.
"Mr. Wynn must answer to the shareholders as he has now lost a loyal investor due directly to his deliberate campaign to discredit me," Mr. Okada said. "His actions have betrayed me, our friendship, the partnership we held and agreements between us, and the Company itself."
In a statement, Mr. Wynn said, "The preliminary vote count clearly illustrates that our stockholders understand that removing an unsuitable person from the Board is vital to the continuing success of the Company as we pursue a growth strategy to expand into new jurisdictions."
The casino operator had sought to shield the company from Mr. Okada's influence while he remained on the board over the past year by creating an executive committee that didn't include him, and met in lieu of the board. Yet Mr. Okada continued to use his position as board member to try to procure internal company documents, which he said he had the right to do.
In a recent court filing, Mr. Okada released Wynn contracts that he said in Thursday's statement showed a relationship with someone a Chinese-language media report identified as being affiliated with the Chinese government. In the statement, he recommended that the contracts be investigated by authorities.
A Wynn spokesman had no comment on the allegations. In the past the company has denied wrongdoing in China.