26 Capital Acquisition Corp. (NASDAQ:ADER) announced this morning that it has postponed its special meeting to approve its combination with gambling resort Okada Manila following a criminal and legal issue involving a former director of the company.
Earlier this month, Universal Entertainment Corporation, the ultimate parent of Okada Manila’s holding company UERI, issued a press release regarding several people who illegally and violently entered and occupied Okada premises under the direction of former director Mr.Okada.
As background, TRA dismissed Mr. Okada from the board of directors back in June 2017, which was done in response to Mr. Okada’s misuse of 2 billion Japanese yen. The company sued Mr. Okada for a liability of damages resulting in the Japanese Supreme Court finding the former director guilty. The Japanese Supreme Court also ruled in April 2022 that there was no defamation with regard to the lawsuit brought by Mr. Okada against the company and others.
Not only that, but Mr. Okada is currently being sued by a law firm in Illinois for damages of approximately 7 billion Japanese yen. It appears that Mr. Okada failed to pay for legal fees, and is also being sued by another law firm in Hong Kong for more non-payment fees. UERI intends to make changes to its Form F-4 in order to add the recent events and information to its associated risks.
Nonetheless, the individuals that entered and occupied Okada Manilla included former director of Tiger Resort, Leisure and Entertainment (“TRLEI”) Mr. Tonyboy Cojuangco, and a building contractor, Mr. Dindo Espeleta, who were accompanied by 50 city police officers and private security guards. The group illegally forced several officers from the resort as well as employees to leave the premises and then illegally dismissed key employees without any authority. And as a result, Tiger Resort will be filing criminal charges with the Department of Justice of the Philippines for trespassing, obstruction of business, theft, assault, and incitement, among other charges.
Tiger Resort Asia Limited holds 99.9% of TRLEI’s voting rights and is a wholly-owned subsidiary of Okada. Since it is a Hong Kong based company, it is not under the jurisdiction of Philippine courts nor subject to the effect of Supreme Court Order which was dated 27 April 2022 issued by the Philippine Supreme Court, Second Division. The current directors of TRLEI have been appointed by TRA and will continue to be responsible for the management of TRLEI.
Naturally, this throws a monkey wrench into any scheduling of a shareholder vote. As far as rescheduling the special meeting, Chairman and CEO of 26 Capital did not disclose a new date, but noted that the record date and meeting will be rescheduled shortly and announced as soon as practical.
26 Capital initially announced its $2.6 billion combination with Okada on October 15, 2021. Okada Manila operates a 42-hectare hospitality complex including the largest integrated casino in the Entertainment City, Philippines.
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