Home > Legal & compliance > Legal > Okada Manila SPAC faces legal investigation over securities fraud allegations
Class action-specialist law firm Pomerantz LLP announced it is investigating claims on behalf of investors in the Okada Manila special purpose acquisition company (SPAC), 26 Capital Acquisition Corp.
Pomerantz’s investigation concerns whether 26 Capital and its officers and directors have engaged in securities fraud or other unlawful business practices.
The suit is just the latest twist in an increasingly acrimonious saga.
The SPAC, which is controlled by CEO and chairman Jason Ader, has been involved in a bitter spat with Okada Manila parent company Universal Entertainment that has involved charges of bribery, fraud and accusations of lying on both sides.
The allegations Pomerantz is investigating match up to those made by Universal in the course of its suit.
Ader’s blank cheque company pens $2.6bn deal with Universal
The story dates from October 2021, when Universal and 26 Capital announced a business combination deal. The agreement valued Okada Manila at an Enterprise value of $2.6bn.
Under the terms, the SPAC would invest the $275m generated by its initial public offering in the Philippines casino complex. The plan then was to use the investment vehicle to get Okada Manila listed on the NASDAQ stock exchange.
It is notable that since the announcement of the merger, 26 Capital’s share price has increased. This is in a period that has seen many other SPACs crumble or being valued at far less than initially promised.
SPAC opts to sue IR operator
In February, 26 Capital sued Universal subsidiary Tiger Resort Asia Ltd. In the suit, it alleged the business had “dragged their feet, making virtually no effort to move forward with the agreed merger – in direct violation of [their] obligations under the merger agreement”.
26 Capital also accused the resort operator of working to “sabotage” the merger and that Universal sent threats to its own auditors.
Universal hits back
In a counterclaim, Universal hit back accusing Ader of securities fraud and breaching the terms of the merger agreement.
Universal filed a regulatory filing dated 30 June seeking to terminate the merger agreement. Within this, it highlighted “material breaches of the merger agreement and fraudulent conduct by 26 Capital”.
The case – which is currently in the closing stages of a trial – has seen increasingly scandalous accusations made on both sides.
In a pre-trial brief filed 26 July, 26 Capital made allegations of bribery in Delaware Chancery Court. The suit claims Universal executives used “heavy luggage” to win over Philippine House of Representatives speaker Martin Romualdez, producing an email to support this charge. Universal denied the “desperate” allegation.
The allegations related to the incident at Okada Manila, when individuals working for the resort’s founder, Japanese businessman Kazuo Okada, took over the venue in a months-long standoff.
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