Wynn partner cleared of tax claim

Monday, April 29, 2002 | 11:27 a.m.

Steve Wynn's Japanese business partner in the development of a proposed Las Vegas Strip report has been cleared of complaints filed by Japanese tax authorities in Tokyo District Court.

The court last week upheld a complaint filed by Japanese slot and pachinko machine manufacturer Aruze Corp. against the Tokyo Regional Taxation Bureau, according to accounts in the Japanese media.

The tax bureau had accused company officials of concealing about 4 billion yen -- $35.1 million -- between the 1996 and 1998 fiscal years. The bureau also fined Aruze 1.7 billion yen ($14.9 million U.S.).

Japanese tax officials said in December 2000 that Aruze had reported fictitious deals with a money-losing subsidiary in Nevada. The court ruled, however, that the deals in question were not fictitious.

Wynn has stood behind Aruze and its top executive, company president Kazuo Okada, since the tax-evasion charges were first disclosed.

Aruze is considered the Japanese equivalent of International Game Technology Inc., controlling 45 percent of of the country's $1.5 billion pachinko market. Okada has been listed by Forbes magazine as Japan's eighth wealthiest person, with a net worth of $4.7 billion. In 1999, he was that nation's largest individual taxpayer.

Aruze has invested $260 million in Wynn's company, which is making plans to develop Le Reve, a $1.6 billion development on the 200-acre Desert Inn hotel-casino parcel.

Earlier this month, Wynn began exploring making part of his gaming company public and conducting an initial public offering later this year. In addition to Le Reve, Wynn is planning a separate project in the Chinese coastal city of Macau.

It is unclear whether the new development involving Aruze would have an effect on plans for the public offering. Wynn and a spokesman could not be reached for comment today.

Wynn's company, however, issued a statement Friday about the tax case.

"The court held that no disguise by Aruze Corp., as alleged by the district national tax office, can be recognized," the statement said. "As a conclusion, the court rescinded all of the reassessments of corporate income tax, consumption tax and the imposition of the relevant heavy additional tax.

"The district national tax office has the right of appeal within two weeks in cases where it deems such appeals are appropriate," the statement said. "At this time, no appeal has been announced."

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