Okada Manila Parent Calls 26 Capital Allegations ‘Absurd,’ ‘Desperate’

Posted on: August 3, 2023, 02:17h. 

Last updated on: August 3, 2023, 02:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Universal Entertainment, the parent company of Okada Manila, responded to allegations levied against it by 26 Capital (NASDAQ: ADER), calling the remarks made in a pretrial brief “absurd” and “desperate” efforts to distract from ongoing legal proceedings.

Universal Entertainment
Universal Entertainment’s Tokyo headquarters. The company called allegations hurled against it by 26 Capital “absurd.”(Image: Reuters)

26 Capital is the special purpose acquisition company (SPAC) controlled by Jason Ader that, in October 2021, reached a deal to take Okada Manila public on a US exchange in a reverse merger valuing the Philippine integrated resort operator at $2.6 billion.

Earlier this week, it was revealed that the blank-check company believes Japan-based Universal engaged in “suspicious activity” amounting to potential graft with Philippine officials in an effort to subvert the merger agreement. In a pretrial brief, 26 Capital produced emails from Universal executives that appear to support those claims. Universal disagreed with the allegations.

This is an obvious and very clumsy attempt to muddle the truth, and to steer away from the fact that Ader SPAC engaged in a systematic course of fraudulent and deceptive conduct, including self-dealing, that made any merger with them impossible,” the company noted in a press statement provided to Casino.org.

Universal lobbed accusations of its own against 26 Capital, claiming that Ader attempted to bribe some officials at the Japanese company and that the SPAC boss employed “private investigators to harass and intimidate senior executives who had reservations about the deal.”

Universal Says Ader Rushed to Complete Okada Manila Deal

From the date a transaction is announced, it’s usually just a matter of months before a blank-check deal wraps up. That’s assuming shareholder votes are executed in a timely manner.

While there are examples of SPAC deals taking a while to conclude, the now 22-month period since 26 Capital and Okada Manila first announced merger plans is unusual. Along those lines, Universal Entertainment asserted Ader had a “frantic need” for the transaction to close due to a deal he made with another investment firm.

The Japanese company claimed the SPAC sold $25 million in stock to Rimu Capital, resulting in a need to expedite the combination with Okada Manila because proceeds from the share sale went into Ader’s personal bank account.

“When the deal did not close, Ader apparently did not return the tens of millions of ill-gotten gains. That investor has now sued Ader for fraud in a US Court. Unfortunately, material and incurable breaches of the merger agreement on their side caused the deal to collapse,” added Universal.

Forced Merger

Ultimately, Universal Entertainment wants the merger agreement terminated while 26 Capital still desires to bring Okada Manila public in the US.

Universal believes the agreement works against the will of the company, its executives and investors, and the law.

“A merger was about to take place, but it did not happen because one party could not be trusted, and broke several stipulations of the deal,” concluded Universal. “That is all there is to it, and to go as far as concocting wild political conspiracies reeks of desperation.”