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Empire East ends talks with Okada group

Posted on November 04, 2013 10:54:29 PM [ BusinessWorld Online ]

LISTED Empire East Land Holdings, Inc. has decided to end talks with the group of Japanese tycoon Kazuo Okada, citing “several variables affecting such a venture,” the firm of tycoon Andrew L. Tan said in a disclosure yesterday.

“The management of Empire East… has decided not to pursue any further discussions with the Okada group after careful consideration of several variables affecting such a venture,” the disclosure read.

The company said that “initially,” a possible partnership for a residential project with the Okada group was deemed beneficial to both parties.

“During the past few months, however, our attention has been called by various sectors -- including some of our public shareholders -- with regard to allegations relating to ownership issues of the property,” Empire East said.

Last July, a fact-finding team of the Justice department recommended the filing of charges against Mr. Okada and 25 others -- including lawyers and 10 companies -- for alleged violations of the Philippine Anti-Dummy Law, Public Land Act and the Foreign Investment Act in connection with a project of the Japanese tycoon’s Universal Entertainment Corp. in Bagong Nayong Pilipino Entertainment City in ParaƱaque City. Universal was said to have created dummy firms in order to circumvent the country’s foreign ownership limits with respect to land and gambling businesses. The case is now under preliminary investigation.

“Given the precarious situation this may present to such a joint venture, it was decided that it is best to withdraw from any further discussion with the Okada group,” the disclosure read.

Empire East and Universal subsidiary Tiger Resort, Leisure and Entertainment, Inc., last year forged a P45-billion joint venture agreement for the development of a 13-hectare (ha) luxury residential resort condominium project in Mr. Okada’s 44-ha Manila Bay Resorts, an integrated casino complex.

The Okada Group, however, has moved forward with a new partnership after it signed a deal with another listed property developer, Century Properties Group, Inc., for a mixed-use project in the same area.

Century Properties said it signed a memorandum of agreement with Universal affiliate Eagle I Landholdings, Inc. (Eagle I), to develop 5 ha in Manila Bay Resorts.

Both companies also forged an investment agreement “whereby Century will be issued 432 million preferred shares, representing 36% of Eagle I’s pro-forma capital stock.”

The value of the project and investment in Eagle I was not immediately available.

According to Century Properties, both transactions “shall occur upon satisfaction of legal and regulatory requirements, and neither transaction contemplates Century being involved in any aspect of the gaming operations.”

Eagle I owns the 44-ha land, while Tiger is one of the four licensees at the Entertainment City.

Aside from Empire East, Okada Group had also negotiated with Gokongwei-led Robinsons Land Corp. for residential, commercial and casino operations projects at the integrated gaming complex.

Those talks, however, collapsed in May for still-undisclosed reasons.

Robinsons Land had planned to develop a high-rise residential project and a retail center in the same 44-ha area.

Shares of Empire East ended trading yesterday at 95 centavos apiece, unchanged from their finish last Thursday. -- Claire-Ann Marie C. Feliciano            
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