SOURCE: Gaming Intelligence Group

Betex Group Plc, the UK based online bookmaker and gaming software developer, is to be removed from the AIM market of the London Stock Exchange tomorrow following the suspension of their shares.

Betex requested that their shares be temporarily suspended on April 18th following the announcement that two senior executives at the company’s Beijing office had been detained by the authorities, while a third executive was being sought by police. At the same time, the company imposed a voluntary nationwide suspension on sales of its software product in China, the company’s main market.

It later transpired that the detained individuals were being investigated over alleged involvement in the crimes of 'Gambling' and 'Illegal Operations'. One of the senior staff members was believed to have been detained in his capacity as the legal representative of Beijing Lottery Technology Company (BLTD), the Chinese company marketing the Betex software product.

The Chinese authorities also confirmed that one other employee of BLTD had been detained, together with one of the agents contracted to BLTD to distribute the software. The police also froze two BLTD bank accounts connected with its operations.

By the end of May, the situation for Betex became even more difficult as the company’s Chief Executive Officer and Finance Director announced their resignations, along with one non-executive director. According to a statement issued at the time, the men resigned following news that their names had been mentioned in connection with the ongoing police investigation in China.

At the time of the suspension, Betex shares were priced at 32.5 pence. The shares were first admitted onto AIM in March 2006 at a placing price of 34.0 pence, achieving a market capitalisation of £45.3 million.

Jeremy Longley, Chief Operating Officer of Betex Group told Gaming Intelligence Group of his disappointment at the prospect of the company loosing its stock market listing. “We have done everything possible to get the shares back to trading in time to avoid delisting, however due to circumstances beyond the company’s control, we have fallen at the final hurdle,” he said, adding “I feel terrible for the investors who hold our stock, and for the lack of information.”

According to Longley, the company was unable to issue statements to its shareholders due to the ongoing nature of the investigation, and until such time that it could be sure there would be no ramifications from the Chinese situation on the company as a whole. Due to lack of transparency in the Chinese legal system, and the inability to gain access to information or the prisoners, it has taken the past six months to establish the facts of the case.

The company now has the assurance that it needed from its Chinese auditors that the arrests will have no further bearing on Betex Group however the company has run out of time to avoid the stock cancellation process.

Under rule 41 of AIM, any shares that are suspended from trading for six months will be cancelled.

The company is now focusing its efforts on its future and is investigating various possibilities to inject liquidity into the business. While its software business was immediately discontinued after the arrests, for the remainder of Betex’s operations, it has been business as usual and the company remains confident of its future prospects.