One of the biggest financial scandals of the Indian online gaming industry has hit Gameskraft Technologies, a leading gaming company based in Bengaluru, which has been dealt a huge blow by the ₹270 crore embezzlement case against its ex-Chief Financial Officer, Ramesh Prabhu.
This is an unprecedented financial fraud that has shockwaved through the industry and brought up a serious concern regarding corporate governance in the fast-evolving gaming ecosystem of India.
The Blowup of a Years-long Financial Fraud
What started as a normal financial audit has turned into a nightmare for the company when the previous CFO of Gameskraft Technologies, Ramesh Prabhu, voluntarily confessed to committing a systematic fraud with corporate funds on personal derivatives and equity trading. The confession, which was sent by email on March 5, 2025, disclosed an elaborate plot that was four years old and had gone undetected.
Prabhu, who was a qualified Chartered Accountant and joined Gameskraft in 2018 and worked his way up the corporate ladder to CFO, confessed that he had used company funds worth above 250 crore in personal futures and options (F&O) trading activities.
The misappropriated funds were carefully buried in a series of unauthorized transactions, between FY2020 and FY2025, by falsified accounting entries and falsified mutual fund statements, which showed the misappropriated funds as valid corporate investments.
The scale of the deception becomes even more apparent when examining the mechanics of the fraud. According to police investigations, ₹231.39 crore was directly transferred to Prabhu’s personal account at RBL Bank, which remained under his exclusive control.
These funds were then systematically funneled into high-risk F&O trading positions, presumably with the intention of generating profits that could be quietly returned to company coffers without detection.
Nevertheless, the fluctuating derivatives trading ended up as the failure of Prabhu. He could not come up with the expected profits and his trading activities cost him heavily in the form of massive losses that eventually left him with no other option but to make the voluntary confession.
The ensuing thorough fact-finding exercise of the company showed the actual degree of financial harm, and Gameskraft has to write off ₹270.43 crore in its financial statements for FY2025.
Legal Implications and Legal Reaction.
The severity of the financial malpractice resulted in a prompt legal response by Gameskraft Technologies. The firm had a formal complaint lodged against Prabhu by the assistant vice-president, Gulshan Yadav, with the Marathahalli police station, which has led to an FIR being registered against him under various provisions of the Bharatiya Nyaya Sanhita (BNS), which include Sections 316, 318, 335, 344 and 336, which have provisions against cheating, forgery, criminal breach of trust and falsification of accounts.
The topmost police officials have realized how complicated and huge the case is and it has been passed to the Criminal Investigation Department (CID) where a deeper and more specialized investigation can be carried out.
This verdict shows the gravity with which the case is being taken by the law enforcement agencies and provides indications that there will be more charges to follow as the case advances.
Currently, Ramesh Prabhu remains at large, with police sources confirming that he is absconding. Authorities are preparing to issue a lookout circular, which will alert immigration and border control agencies to prevent him from leaving the country while the investigation continues.
This development adds an additional layer of complexity to the case and raises questions about whether Prabhu had advance knowledge of the impending discovery of his fraudulent activities.
Impact on Gameskraft’s Financial Performance and Market Position
The financial scandal comes at a particularly challenging time for Gameskraft Technologies, which has been navigating significant regulatory headwinds in the Indian gaming industry. Despite reporting a 12% year-on-year revenue increase to ₹3,896 crore in FY2025 from ₹3,475 crore in FY2024, the company’s profitability took a substantial hit, with profits declining by 25% to ₹706 crore.
The ₹270 crore write-off related to Prabhu’s fraudulent activities has been classified as exceptional items in the company’s financial statements, highlighting the material impact of the scandal on the organization’s financial health.
The timing of this scandal is particularly unfortunate for Gameskraft, as the company has already been grappling with regulatory challenges stemming from the government’s Promotion and Regulation of Online Gaming Act, 2025, which effectively banned real-money online gaming in India.
This regulatory shift forced the suspension of operations for several of Gameskraft’s popular gaming platforms, including RummyCulture, Gamezy, Pocket52, and Ludo Select, significantly impacting the company’s revenue streams and market position.
Broader Implications for India’s Gaming Industry
The Gameskraft scandal is not only a singular example of corporate fraud, but it is also a sobering note of the significance of having strong internal controls and governance systems within India’s fast-growing gaming industry. Since the industry is still of great interest in terms of investment and regulation, this incident underscores the necessity of more stringent regulation and risk management measures among gaming firms.
Another questionable issue that arises in the case is the effectiveness of the existing auditing and compliance systems to identify advanced financial fraud. It is further indicated by the fact that the unauthorized actions of Prabhu could go on without detection even within four years with such large sums at stake, which could mean that the internal audit procedures and financial oversight mechanisms have loopholes that might be common in the industry.
Moreover, the scandal takes place in the context of a growing regulatory interest in the gaming industry, as the government already has started enforcing more strict compliance and operation policies. This further regulatory burden, coupled with the reputational risk of big-box fraud cases such as this one, could create further consolidation in the industry as smaller players find it difficult to comply with more stringent regulatory requirements while remaining profitable.
The Gameskraft Technologies embezzlement scandal comes as a watershed event to the gaming industry of India, as it portrays the significance of corporate governance, internal control and ethical leadership in a progressively highly regulated and competitive market.
The case is expected to have long-lasting impacts onindustry practice and regulation in the years ahead, defining the future environment of the Indian online gaming industry.
