A special-purpose acquisition company (SPAC) suing Universal Entertainment Corp. has alleged that Japanese entertainment company officials involved in a merger fight associated with a Manila-based casino resort sought to improperly affect a leading Filippino lawmaker who could help them regain control of the property.
At the beginning of the week, the SPAC – 26 Capital Acquisition Corp. – tabled a filing in Delaware Chancery Court, claiming that Universal Entertainment executives have tried to influence the speaker of the Philippine House of Representatives Martin Romualdez to secure his support in the aforementioned controversy. As previously reported, the company has been trying to regain its control of Okada Manila – a resort and casino property estimated at $2.6 billion.
The court filing includes emails, in which 26 Capital claims the executives in question came specially from Japan to meet with Mr. Romualdez to ensure his support in pressuring the country’s Supreme Court to side with their interests. The legal representatives of the special-purpose acquisition company claim that the wrongdoings of Universal Entertainment include potentially offering bribes to governmental officials, and efforts to complete the deal off-record before these activities are unveiled.
As revealed by Bloomberg, so far none of the parties involved in the SPAC’s claims have responded to calls seeking comment on the allegations.
Okada Manila Casino Resort Controversy Magnifies
So-called special-purpose acquisition companies are formed with the only purpose of buying another company with the investors’ money they manage to attract and take it public. They managed to quickly become popular in the financial and gambling world before they eventually fell under increased government scrutiny.
26 Capital was launched by Jason Ader, CEO of SpringOwl Asset Management LLC, with the purpose of combining it with the Okada Manila resort and securing a listing for the property. The deal, however, turned out unsuccessful, so the special-purpose acquisition company took Universal Entertainment to court in an attempt to revive the deal. In July, Mr. Ader provided his testimony on the case, saying that Universal started working with the purpose to sabotage the transaction in 2022. As previously reported by CasinoGamesPro, the planned merger was officially announced as dead by Universal Entertainment on June 30th.
The legal action involves a $275-million investment that 26 Capital made in the resort and casino. For the time being, 88% of the property is owned by Universal Entertainment under the terms of the deal. The transaction, however, has been complicated by some problems within the Japan-based operator, as the mother company and its units managing the Okada Manila casino have been locked in serious disagreement after Japanese billionaire investor Kazuo Okada got ousted from the board in 2022.
Mr. Okada managed to take control of the property after he was reinstated as chairman of Tiger Resort Asia, a division of Universal Entertainment, by the Philippine Supreme Court. As alleged by the special-purpose acquisition company, that move triggered some Universal executives’ grudge, as they came up with a plan to regain control of the casino.
According to the SPAC’s court filing, Romualdez was influenced by Universal Entertainment’s efforts and called justices of the Filipino Supreme Court to urge them to allow Tiger Resort’s unit to regain control over the Okada Manila resort. The special-purpose acquisition company alleges that its officials were never informed about the July 2022 move. The legal case is being heard in Delaware because 26 Capital Acquisition Corp. is incorporated there.