BETEX EXECS ARRESTED IN CHINA

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Shares suspended - but detentions may be due to individual rather than company conduct

Asian marketers will be watching for more detail than is presently available following reports from Jilin province in China that two Betex senior employees have been arrested and a third is being sought.  The news prompted Betex, a Chinese lottery scratchcard and gaming software operator, to suspend trading in its shares on the London AIM market, although it is not certain that the company is involved in the case.

A Betex spokeswoman told The Times newspaper that it is believed the alleged illegal activity "relates to conduct by these individuals and does not call into question the legality of the company's software product, or the conduct of the company."

In a statement, the company, founded by entrepreneur Johnny Hon who has an 18 percent stake, and run by former banker Peter Greenhill, said it had suspended sales of its major software product across China. The product relates to a service provided for China's daily national lottery draw, according to the spokeswoman, who was unable to give further details.

The company said it was working with its legal advisers to try to obtain more information and was assisting the authorities wherever possible.

Betex's business is almost entirely dependent on the Chinese market, reports The Times. Its shares have collapsed from a high of 80p shortly after flotation a year ago, hit by fears over a clampdown on online gambling. They were suspended at 32.5p.

At the end of last year it unveiled a plan to begin selling lottery scratchcards in partnership with lottery authorities in Hebei province.

Scratchcards in China were a huge hit before being withdrawn during the 1990s after concerns over fraud. Betex has contracts to supply football-based lottery products to a number of Chinese provinces.

The Betex board includes John Blower and Philip Goodmaker, both of whom were previously directors of Sportingbet Plc. Jason Drummond, the internet entrepreneur and head of Gaming Corporation plc (now Media Corporation plc) is also believed to have a stake in the company.

The Financial Times reports that the company has also postponed publishing its 2006 results by more than two weeks, citing a lack of resources in China ahead of a public holiday.