By Emi Emoto and Nathan Layne

TOKYO (Reuters) - The president of Japan's Universal Entertainment Corp said the company's founder Kazuo Okada is "unfit" to be the director of a public company, in a private letter to a shareholder seen by Reuters.

The June 21 letter was written by Jun Fujimoto ahead of an annual meeting of Universal shareholders on Thursday at which Okada lost his position as board chairman. Shareholders approved a slate of directors that did not include Okada, a company spokesman confirmed. The meeting was not open to the media.

The board shake-up comes three weeks after Universal announced that it had established an internal investigative panel to probe Okada’s use of company money. Universal said it had found three cases in which Okada misappropriated a total of $20 million in funds.

Okada addressed those allegations for the first time on Thursday on the sidelines of the meeting in a Tokyo hotel. Okada made the comments after being told he could not attend the meeting because his stake in Universal is held indirectly by a holding company.

"I've done nothing wrong," Okada told reporters. "I've been barred from the meeting in the name of this investigative panel and allegations that are a bunch of nonsense."

Universal said it could not comment on letters to or from Fujimoto as an individual and declined to make him available for an interview.

Peppered with criticism of Okada, the letter offers a glimpse into the mindset of Fujimoto, 59, as he pushes ahead with an attempt to sideline Okada, 74, in a rare Japanese boardroom coup.

"I think Chairman Okada is unfit to be in management of a public company," Fujimoto said in the letter, which was written in Japanese. "I'm confident that I can prove that with irrefutable physical evidence." He did not say what that evidence was.

The approved slate of directors included Okada's wife, Takako. Universal also brought back a former finance executive and added an external director to the board.

Those changes were made possible by the resignation of Okada in May as director of Okada Holdings Ltd, a company based in Hong Kong that owns 69 percent of Universal's stock and therefore holds sway over appointments to Universal's board.

Okada stepped down as the result of a rift with family members, who control a majority of Okada Holdings' stock, Reuters reported on Wednesday.

Fujimoto was responding to a letter from shareholder Tsuyoshi Hosoba, who had unsuccessfully sued Universal directors in 2015 alleging they breached their fiduciary duties on a series of matters, including in relation to $40 million in payments from affiliates of Universal in 2010 to a Philippine consultant, who was working on the company's $2.4 billion casino on Manila Bay.