Gameskraft's ₹270 Crore Scandal: Ex-CFO Admits to Misappropriation Amidst Online Gaming Act Compliance Struggle
India's gaming industry, particularly the gaming startup Gameskraft, is facing significant challenges. The company recently discovered misappropriated funds, which were wrongly recorded as investments, leading to a ₹270.43 crore write-off and a ₹21,000 crore tax evasion notice.
The turmoil began when Gameskraft, a prominent player in the free games industry, uncovered these irregularities. A forensic audit confirmed the misappropriation, resulting in a massive write-off. The company is now strengthening its internal controls to prevent such incidents in the future.
Gameskraft's former group CFO, Ramesh Prabhu, is at the center of this scandal. He admitted to misappropriating funds for personal trading, causing a loss of over ₹250 crore. Prabhu allegedly transferred funds into his personal account, falsified records, and created fake statements to hide transactions. Gameskraft filed an FIR against him, accusing him of theft, breach of trust, forgery, and other offenses.
The timing of the scandal coincides with Gameskraft's struggle to comply with India's new Online Gaming Act, which effectively bans real-money gaming. Earlier, Gameskraft, known for its popular Poki games, suspended its online poker platform, Pocket52, due to the 28% GST regime introduced in October 2023.
Gameskraft is reinforcing its internal controls following a ₹270.43 crore write-off due to misappropriated funds. The company's former CFO, Ramesh Prabhu, admitted to the wrongdoing, leading to an FIR. The scandal comes amidst Gameskraft's ongoing efforts to comply with India's new Online Gaming Act.
