JAPANESE gaming tycoon Kazuo Okada has lost control over the country’s largest hotel-casino, the Okada Manila Resort in Parañaque, after the Supreme lifted the status quo ante order (SQAO) it issued in April 2022 which he used as basis to regain ownership of Tiger Resort Leisure and Entertainment Inc. (TRLEI), the company that operates the establishment.
In a 14-page decision, the Court’s First Division held that Kazuo’s complaint—that was elevated before it following its dismissal by the Regional Trial Court of Parañaque City on November 16, 2018 and the Court of Appeals on September 24, 2020—was an election contest and has since prescribed.
The Court noted that the complaint was filed more than a year after the 15- day reglementary period under the Interim Rules of Procedure for Intra-Corporate Controversies (Interim Rules).
“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 as director, chairperson, and CEO [chief executive officer] of TRLEI were held,” the SC said in a resolution dated November 13, 2023 but released last Tuesday.
“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.
Lack of basis
Likewise, the Court 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.
The SC said Kazuo was merely a nominal shareholder in TRLEI and had no control over Okada Holdings Limited (OHL) and its subsidiaries.
This was established, according to the Court, by the evidence submitted to the CA which was tasked by the SC to look into Okada’s ownership dispute.
It noted that the CA was able to verify that the one share registered in the name of Kazuo 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However, the TRAL deed of assignment, had been revoked by Tiger Resort Asia Limited (TRAL) in June 2019 which resulted in the cancellation of Kazuo’s stock certificate in TRLEI.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 SC said.
Kazuo 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 Parañaque RTC City on August 29, 2018 against TRLEI and its directors Manuel Lazaro, Kenji, Sugiyama, Wolstenholme, Antonio Cojuangco Reynaldo David, Yoshinao Negishi and Tiger Resort Asia Limited (TRAL) and its directors Kenshi Asano and Takako Okada.
He 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 prayed that judgment be rendered declaring as null and void ab initio his removal as stockholder, director, chairperson, and CEO of TRLEI, and reinstating him to those 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 CA’s study of the evidence in connection with Okada’s ownership.
The SQAO directed all parties in the case to observe status quo prevailing prior to Kazuo’s removal as stockholder, director, chairperson and chief executive officer of TRLEI.
The Court said 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 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: on the propriety of maintaining the SQAO in view of alleged developments in Tiger Resort Leisure and Entertainment Inc. (TRLEI) following Kazuo’s ouster, specifically, its financial condition and the alleged dissipation of its assets; 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; 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.
Likewise, 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, Okada Manila Inc. (OMI), TRAL (Tiger Resort Asia Limited) 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.
Image credits: Mike Gonzalez via Wikimedia Commons CC BY-SA 3.0