Pomerantz LLP, a firm known for its class action lawsuits, has taken up the task of probing into claims related to investors of the Okada Manila special purpose acquisition company (SPAC), 26 Capital Acquisition Corp. The investigation is centered around whether 26 Capital and its top brass might have committed securities fraud or been involved in other illicit activities.
This move adds another layer to the already intense drama between 26 Capital, helmed by CEO Jason Ader, and the parent company of Okada Manila, Universal Entertainment. Accusations ranging from bribery and deceit to fraud have been hurled between the two.
Interestingly, these claims under Pomerantz’s lens mirror those presented by Universal during their legal face-off.
Delving into the backdrop, Universal and 26 Capital unveiled a collaboration in October 2021, placing the enterprise value of Okada Manila at $2.6 billion. As per the deal, 26 Capital would pour the $275 million secured from its IPO into the Philippines casino establishment. The ultimate goal was to propel Okada Manila onto the NASDAQ platform.
Since the merger news broke, 26 Capital’s stocks have seen an uptick, a stark contrast to many other SPACs that either plummeted or didn’t meet initial expectations.
However, things soured in February. 26 Capital launched a lawsuit against Universal’s branch, Tiger Resort Asia Ltd, accusing them of stalling the merger process. The SPAC even asserted that Universal sought to “undermine” the merger and leveled threats at its own auditing team.
But Universal didn’t stay silent. They retaliated, pointing fingers at Ader for securities fraud and flouting the merger terms. A regulatory document submitted by Universal on 30 June expressed their desire to pull the plug on the merger deal, citing “fraudulent conduct by 26 Capital” and significant breaches.
The courtroom battle has intensified, with both parties making sensational claims. A prime example was when 26 Capital, in a document dated 26 July, alleged that Universal executives tried bribing Philippine House of Representatives speaker, Martin Romualdez, with “heavy luggage”. Universal was quick to refute this claim, dismissing it as a baseless attempt.
Matters further escalated at Okada Manila after some associates of its founder, Kazuo Okada, momentarily seized control of the venue, leading to an extended deadlock.
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