Gameskraft Technologies Reports Profit Decline Amid CFO Fund Misuse Scandal
Gameskraft Technologies reported a decrease in net profit from ₹947.00 crore to ₹706.00 crore, despite revenue growth to ₹4,009.00 crore. The profit decline is attributed to the 28% GST impact and a ₹231.00 crore accounting adjustment due to unsanctioned transactions. The company filed a police complaint against its former Group CFO for allegedly misappropriating ₹231.39 crore for personal trading. Gameskraft has halted 'Add Cash' and 'Gameplay' services on its rummy apps to comply with new regulations. The online gaming industry in India faces regulatory challenges, including retrospective tax notices totaling ₹2.50 lakh crore under Supreme Court review.
*this image is generated using AI for illustrative purposes only.
Gameskraft Technologies, a prominent player in the online gaming sector, has reported a significant drop in net profit, accompanied by a major financial scandal involving its former Group Chief Financial Officer (CFO).
Financial Performance
The company disclosed the following financial results:
| Metric | Current Year | Previous Year |
|---|---|---|
| Net Profit | ₹706.00 crore | ₹947.00 crore |
| Revenue | ₹4,009.00 crore | ₹3,475.00 crore |
Despite the increase in revenue, the company's profitability took a hit due to two primary factors:
- The full-year impact of the 28% Goods and Services Tax (GST) implementation
- A one-time accounting adjustment of ₹231.00 crore related to unsanctioned transactions
CFO Fund Misuse Scandal
Gameskraft Technologies has filed a police complaint against its former Group Chief Financial Officer, alleging the misappropriation of company funds. Key points of this scandal include:
- The accused CFO allegedly siphoned off ₹231.39 crore through unauthorized financial transactions.
- The CFO reportedly admitted to misusing company funds for personal equity and derivatives trading.
- The company removed the CFO from his position.
- The accused has been absconding since the admission.
- Gameskraft has conducted a forensic audit and is actively attempting to recover the misappropriated funds.
Regulatory Challenges
The online gaming sector in India, including Gameskraft Technologies, is facing significant regulatory challenges:
The company has halted 'Add Cash' and 'Gameplay' services across its rummy apps in compliance with the Promotion and Regulation of Online Gaming Act, which prohibits online real-money games.
The broader online gaming industry is grappling with retrospective tax notices totaling ₹2.50 lakh crore, which are currently under review by the Supreme Court.
Industry Outlook
The recent developments at Gameskraft Technologies highlight the complex landscape of the online gaming industry in India. As regulatory scrutiny intensifies and new laws come into effect, companies in this sector may need to adapt their business models and strengthen their internal financial controls.
The case of alleged fund misuse by a high-ranking executive underscores the importance of robust corporate governance and internal audit mechanisms in the fast-growing tech industry.
As Gameskraft Technologies works to recover from this financial setback and scandal, the company's future performance will likely depend on its ability to adapt to the new regulatory framework and restore investor confidence in its financial management.
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