TOKYO: The FBI and Philippine investigators probing potential bribery related to Universal Entertainment Corp's bid to build a casino in Manila have zeroed in on a US$25mil payment the Japanese company now says should never have been made.
Rodolfo Soriano, a consultant with ties to the former head of the gaming regulator in the Philippines, received the fee in 2010 to secure land rights for the US$2bil casino, Universal had said. But records reviewed by Reuters show those rights were obtained for free in 2009.
The FBI is involved because the payment originated from a Universal subsidiary based in Nevada. Both the FBI and the Philippine National Bureau of Investigation (NBI) have been looking into a total of US$40mil in transfers to Soriano as a possible bribery case since last year.
In a closed-door, three-day hearing with the Nevada Gaming Control Board that concluded on Friday, Universal directors, including the company's billionaire founder Kazuo Okada, were questioned about the payment, a source familiar with those proceedings said.
In a statement issued to Reuters as that hearing ended, Universal said it now believed the US$25mil payment to Soriano should not have been made.
Universal said its board had not been aware that the land rights problem had been resolved without any money changing hands between Universal and the owner of those rights in late 2009.
It blamed three former employees for the mistaken payment and said one of them had withheld information from the board that could have prevented the transfer.
Universal sued the three Japanese men last year, claiming they were to blame for US$15mil in payments to Soriano without proper authorisation. It offered no evidence to support its additional claim they were also responsible for the US$25mil it has now disavowed and said its investigation into the matter was still ongoing.
The three former employees declined to comment. They have challenged the company's previous claims in filings to the Tokyo District Court.
Soriano could not be reached for comment and his whereabouts are unknown.
Universal generates the bulk of its profits from pachinko machines a cross between slots and pinball in Japan. The Philippines marks its first independent foray into casino operations and is a key plank of its push to expand overseas.
It has said it conducted its business in the Philippines lawfully, and in December announced a defamation suit against Reuters for its reporting on the payments to Soriano.
Universal said it was still investigating how the US$25mil payment to Soriano was used.
“We have no information at this time that this money was used to pay any government officials,” the company said in a written statement to Reuters.
When Universal paid US$300mil for reclaimed land for its Manila Bay casino project in 2008 it failed to secure the rights to develop more than a dozen “road lots”, representing about a quarter of the site of a luxury complex it hopes to open in 2014. The titles to the lots were held by local developer Asiaworld Properties Philippine Corp, records show.
Universal turned to the Philippine Amusement and Gaming Corporation (Pagcor), the industry regulator, to find a solution to the road problem, according to the people with knowledge of the matter. Pagcor declined to comment on its involvement. - Reuters