After the government flagged the financial and psychological impact of online gaming by proposing a complete ban on money-based gaming last month, a unique case has come to the fore involving Gameskraft Technologies’ former CFO, Ramesh Prabhu, who allegedly diverted company funds worth ₹250 crore for futures & options trading. 

The incident happened back in March 2025, though the case against Prabhu was lodged on September 9, 2025, after Gulshan Yadav, who is assistant vice-president of Gameskraft, filed a complaint against the former top financial executive at the company. It remains unclear why the company took so long to file an official complaint against Prabhu, but it underscores the mess some gaming companies find themselves in. Gameskraft is yet to come out with an official statement on the matter.

Let's try to understand what the case and the contents of the FIR, a copy of which Fortune India has access to:

Who is Ramesh Prabhu & what he's accused of?

Prabhu, former CFO at Gameskraft Tech, one of India's leading RMG companies, is a CA by profession. Before Gameskraft, he worked as CEO with Three Wheels United, a fintech that provides loans to autorickshaw drivers. On March 5, 2025, he sent an email to the company management, confessing to the misuse of company funds for F&O trading for three years. The FIR says Prabhu accepted his role in misusing the funds, which amounts to fraud and serious breach of trust. 

The FIR also cites Prabhu as confessing that no one else but him was involved in the fraud. The confession email clearly shows he carried out his activities without any disclosure or approval. After sending the email, he went underground and has been untraceable, according to police. 

Accordingly, following the company's fact-finding review, it came to light that he carried out unauthorised transactions worth ₹231.39 crore up to FY25. 

2. What are the sections under which the case is filed?

The Marathahalli police in Bengaluru lodged a case against Prabhu under sections 316(4) (criminal breach of trust by employee), 318 (4) (cheating and dishonestly inducing delivery of property), 335 (making a false document), 344 (falsification of documents), and 336 (2) (forgery) of the Bharatiya Nyaya Sanhita (BNS). 

The FIR states that from FY2019-20 onwards, the accused not only misappropriated funds but, in order to evade scrutiny and detection, deliberately took steps to misrepresent, remove, and conceal the true nature and movement of the company's funds. He also created fabricated mutual fund statements as supporting documents for his claims of investment to make the company and its auditors believe them to be genuine. Further, as the Group CFO, he also signed off on the company's books of accounts from FY2019-20 onwards, resulting in inaccurate financial statements. 

3. What was the assessment of the fact-finding review team?

Following the receipt of the email, the company claims it carried out a comprehensive fact-finding review. "Basis the records available with the Complainant Company, it appears that the Accused had executed unauthorised financial transactions totalling ₹231.39 crores from FY 2019-20 up to FY 2024-25," says the FIR. 

It adds that of this, ₹211.53 crore were wrongly recorded as "investments in the company's books of accounts. These 'investments' have a carrying value of ₹250.57 crore as of 31 March 2024. The company also discovered that an additional amount of ₹19.86 crore was expensed as "investments" in FY 2024-25. In view of this, the company was required to write off ₹270.43 crore in its financial statement for the Financial Year 2024-25. The company also found that Prabhu carried out these unauthorised transactions using an RBL Bank account, which he closely controlled and used for his personal use.

4. Why is this another major blow to Gameskraft after the Online Gaming Bill?

The development comes close on the heels of the government passing the Online Gaming Bill, 2025, which put a blanket ban on all money-based gaming companies and their RMG (real money gaming) activities in India. This put around 2,000 startups under ban overnight and threatened the livelihood of around 2 lakh direct and indirect employees associated with the industry. However, the new gaming bill clearly aims to encourage esports gaming and associated companies, and social gaming in India. The move is seen as a bold initiative to navigate the industry towards developing games that involve a high degree of skill and do not involve money as a way of “gambling”.

Faced with a harsh ban, some of the big companies, including Gameskraft, resorted to a quick pivot by discontinuing their highly profitable money-based operations and initiating a hunt for newer avenues, including esports. Gameskraft, a bootstrapped startup, is a highly profitable company. However, after the ban on money-based gaming in India, the company has faced a massive setback. When we tried to open the website, it said: "In compliance with The Promotion and Regulation of Online Gaming Act, 2025, Gameskraft has discontinued its operations until further notice." The company’s FY25 profit stood at ₹706 crore, down from ₹947 crore in the previous year. Its revenue stood at ₹4,009 crore, up 13.9% from ₹3,521 crore in FY24.