Valuation soars
It is noteworthy that DTE was a "shell company" with registered capital of HK$8 million ($1.03 million) and merely 10-plus employees in 2005 when it reached agreement with CLO to supply terminals. It neither has R&D team nor factory buildings and its only shareholder is an overseas company named Toward Plan Investment Ltd (TPI).
In 2006, 50 percent of TPI shares (equals to 50 percent of DTE shares) was sold to China LotSynergy at HK$ 980 million in 2006, while TPI kept the remaining half shares.
This means that the valuation of TPI (equals to the valuation of DTE) has skyrocketed to HK$1.96 billion from a mere HK$ 8 million, in a year after its contract with CLO to supply the terminals.
When negotiating the contract about selling stakes, He Wen and Liu Ting, Board Chairman of China LotSynergy, were two main participants, said an insider who participated in the negotiation.
He Wen participates in the negotiation in the capacity of the actual controller of DTE, said the insider.
Besides benefits from selling stakes, evidence collected by the reporter with Economic Information shows that China LotSynergy and shareholders of TPI have each acquired 390 million yuan in dividend yield from DTE annually since 2006.
He Wen and Liu Ting both declined interview requests from the newspaper.
Under-the-table deals in the lottery industry have been exposed over years.
Liu Liang, a lottery winner, was accused by the lottery organizer of faking the winning ticket in Xi'an, Northwest China's Shaanxi province in 2004. But the investigation showed that the lottery draw was manipulated by a lottery selling agent.
In Jan 2015, the last episode of the latest China's Union Lotto TV live show was unexpectedly called off, which was later explained by the lottery organizer as a result of data transmission failure. The case made people question the lottery's credibility.
