Romualdez in the center of a US bribery case over the Okada dispute

SPEAKER Martin Romualdez is at the center of a bribery case in the United States involving the raging conflict between Japanese billionaire Kazuo Okada and his son over ownership of Okada Casino Resort Manila.

A US-based company, the 26 Capital Acquisition, has sued Okada Manila’s parent company, Universal Entertainment, before the Delaware Chancery Court over an aborted merger between them, and part of its complaint said that Universal officials brought a “heavy luggage” supposedly filled with cash in July 2022 “for Speaker Romualdez to try to secure his support in the dispute in favor of Universal,” the company controlled by Okada’s son, Tomohiro.

Various news agencies reported the story, based on documents filed by 26 Capital last July 31 in Delaware Chancery Court. Among these agencies were Bloomberg, Japan Times, the Casino.org, Bloomberg Law News, Focus Gaming News.

In its story on August 1, 2023 titled “Japanese firm accused of improper influence over Manila casino” the Japan Times carried Bloomberg story and reported:

‘Heavy luggage mission’

“The filing includes emails that 26 Capital says show the (Universal) executives flew from Japan to meet with Romualdez to enlist his help in pressuring the nation’s Supreme Court to advance their interests. The SPAC’s lawyers claim that Universal’s wrongdoing includes `potential bribery of governmental officials followed by efforts to run the deal clock out before such activity comes to light.’

“According to the filing, the emails show that a Universal executive flew from Tokyo to the Philippines a year ago, bringing the “heavy luggage” with him. He and a second Universal official met with Romualdez, 26 Capital claims.

“Romualdez then called justices of the country’s Supreme Court to urge them to allow the Tiger Resort unit to take back the resort…”

Romualdez ignored calls to dispute the story, the Japan Times reported.

Jason Ader, CEO of SpringOwl Asset Management, formed 26 Capital to combine it with Universal and secure a public listing for the property, amid the ongoing ownership battle between the Okada father and son.

But the relationship between Ader and the Tomohiros turned sour, and the deal collapsed on June 30, prompting 26 Capital to sue Universal in Delaware, where the 26 Capital was incorporated.

Universal supposedly terminated the deal because 26 Capital had committed “material breaches of the merger agreement and fraudulent conduct.”

The report said Ader and other 26 Capital officials were “never told about the July 2022 top-secret heavy-luggage mission,” his lawyers said in the report.

Martin’s friends

The 80-year-old Kazuo Okada and son Tomohiro have been at odds for the past six years, shortly after Okada built the casino complex in Manila. The elder Okada was ousted as chairman of the parent company and of Okada Manila, but a Supreme Court decision reinstated him in Manila, sending Universal officials in panic.

How Romualdez got involved in the conflict?

It was widely believed that Kazuo’s camp got the ear of a senior official of the Duterte administration, who supposedly helped them facilitate getting the status quo order that reinstalled the elder Okada.

Tomohiro’s camp has been banking on the connections of former Subic Bay Metropolitan Authority director, James Lorenzana, in the Marcos administration for them to reach out and articulate its side.

Lorenzana is supposedly close to Romualdez, an Upsilon fraternity brother way back in their college days at the University of the Philippines.

But it was the first time that the bribery allegation had come out in the open when it formally reached the Delaware court. The allegation had long circulated in Manila shortly after Romualdez’s cousin, Ferdinand Marcos, assumed the presidency in June 2022, but no one would like to make an official comment on the story.

‘Suspicious activity’

In its July 31 story titled Universal Accused of ‘Suspicious Activity’ in Legal Rift with Ader SPAC, the Casino.org reported that Universal may have engaged in “dubious activity potentially bordering on bribery” to gain favor among authorities in the Philippines.

Quoting the same court documents, the Casino.org story said: “Defendants also appear to have engaged in suspicious activity to obtain government assistance to regain control of the casino: a senior Parent executive brought ‘heavy luggage’ to meet with the Speaker of the House of the Philippines— Martin Romualdez (all in breach of the ordinary course covenants),” according to the legal document.

‘Damning emails’

“The pretrial brief contains emails obtained by the SPAC that indicate Universal executives may have attempted to commit graft in the Philippines.

A July 2022 email from Universal CFO Asano Kenshi to board member Hajime Tokuda indicated Mr. Sato was on his way to the Philippines the next day “with heavy luggage.” Presumably, Mr. Sato is Sato Nobuki. Tokuda responded by saying that after the item “arrives safely,” he would set up a meeting with Martin Romualdez.

“26 Capital also alleged that Hans Van Der Sande, the chief financial officer of the operating company, received real-time updates on the goings on through a secret Hotmail account.

“As soon as this ‘Philippine lobbying’ — to use Defendants’ phrase — succeeded, in August 2022, Van Der Sande’s mission became quashing this deal which would bring management reform, potential investigations, and U.S. regulatory scrutiny,’ according to the brief.”

“Following Okada’s coup attempt at his namesake casino hotel, Universal supposedly employed a more direct approach with Philippine authorities that included the “item” described as “heavy luggage.”

Buzz words, coded message

“These barely-disguised buzz words were used in top-secret internal emails and discussed only at the very top of UEC,” as noted in the legal document. “Within three days of the ‘item’ being delivered, Parent and Operating Company Director Tokuda (who was also Mr. Van Der Sande’s closest ally at Parent) met directly with Speaker of the House Martin Romualdez.”

“During this time, 26 Capital worked to bring the merger across the finish line. By last September, the Philippines Department of Justice and the Philippine Gaming Corporation issued opinions against Okada. Later that month, armed military personnel and police retook control of Okada Manila.

Bloomberg reported that “so far none of the parties involved in the SPAC’s claims have responded to calls seeking comment on the allegations.”