SEC ruling favors Okada Manila backdoor listing plan

A unit of the Securities and Exchange Commission has rejected a petition to stop the proposed backdoor-listing of Okada Manila through Asiabest Group International Inc. (ABG) as two factions battle for control of the newest integrated gaming resort along Manila Bay.

An eight-page order issued by SEC markets and securities regulation department (MSRD) director Vicente Graciano Felizmenio Jr. dated Dec. 11, 2018 dismissed a complaint by one Carnell Valdez, a shareholder of ABG, to implement a cease-and-desist order against Okada Manila’s controlling shareholder Tiger Resort Asia Ltd. and ABG itself.

Also included as respondents were the Philippine Stock Exchange and The First Resources Management and Securities Corp.

The SEC was asked to intervene by exercising its authority over the PSE prior to its approval of the backdoor listing of Tiger Resort.  Valdez had also complained that the criminal and civil proceedings in Hong Kong related to ousted chair Kazuo Okada’s bid to regain control of the Philippine unit were not disclosed when the tender offer for shares of ABG was filed.

Valdez was referring to civil and criminal suits filed by Japanese tycoon Kazuo Okada and his daughter Hiromi Okada in Hong Kong to regain control of Okada Holdings, and to secure criminal convictions for fraud and financial crimes against those responsible for what they alleged as Kazuo’s “illegal” ouster as sole director and/or chair of Okada Holdings, Universal Entertainment Corp., and Tiger Resort in 2017. Kazuo is battling his own son Tomohiro Okada, as well as Jun Fujimoto, current president and chief executive officer of Universal Entertainment at the courts.

For its part, the SEC unit took the position that at the time of filing the tender offer report, Tiger Resort was “not yet required to disclose the pending criminal and civil proceedings in Hong Kong.” Citing existing provisions, MSRD said that criminal proceeding is required to be disclosed “if a person has been convicted.”

“On the other hand, civil proceeding is required to be disclosed if a person has been the subject of any order, judgment or decree not subsequently reversed, suspended or vacated,” the MSRD ruling stated.

The MSRD, however, directed Tiger Resort to file an amended tender offer to fully disclose factual information relative to the conflict that in turn led to the civil and criminal cases against the directors and officers of Universal Entertainment Corp. and Okada Holdings Ltd. in Hong Kong and the status of the same.

“MSRD is of the position that the filing of an amended tender offer will prevent any grave and irreparable damage to shareholders of ABG and the investing public,” the ruling said.

The SEC unit further directed Tiger Resort to immediately cause the publication of the amendment once in two newspapers of general circulation, and to extend the tender offer period for 10 business days reckoned from the publication of the tender offer.

This means that the closing of Tiger Resort’s tender offer for ABG shares by way of special block sale will not push through as originally scheduled on Dec. 14.

“We welcome the SEC’s order directing Tiger Resort to delay the tender offer until after a full disclosure is made of the circumstances surrounding, and status of, the legal proceedings initiated by Kazuo Okada and his daughter to regain control of Okada Holdings and its subsidiaries, and to criminally charge those responsible for Kazuo Okada’s alleged illegal ouster from the said companies,” said Salvador Paolo Panelo Jr., counsel for Valdez. —DORIS DUMLAO-ABADILLA