The Karnataka High Court ordered the immediate release of Gameskraft founders Deepak Singh, Vikas Taneja, and Prithviraj Singh, holding that their arrests by the Enforcement Directorate (ED) were not in accordance with the law.
According to multiple media reports, Justice M Nagaprasanna allowed the petitions filed by the founders and declared their arrests “contrary to law”. The court also directed prison authorities to release them immediately. A detailed copy of the judgment is awaited.
The three founders, who are directors of Gameskraft Technologies and RummyCulture Technologies, were arrested from Gurugram in May this year and later brought to Bengaluru in connection with a money laundering investigation.
The ED’s case stems from three FIRs registered in Telangana earlier this year. The agency has alleged that Gameskraft’s online gaming platforms engaged in unfair practices, misled users, and generated proceeds of crime that were subsequently laundered through various transactions.
According to the ED, the company attracted users to its real-money gaming platforms through bonuses, referral rewards, cash offers, and tournament incentives. The agency also claimed that several users complained about suspected use of bots and algorithms, one-sided gameplay, recurring score patterns, forced logouts, and blocked accounts.
The ED further alleged that the founders, along with former chief financial officer Ramesh Prabhu, diverted and laundered nearly Rs 250 crore under the guise of investments in futures and options as well as mutual funds.
The High Court order comes at a time when online gaming companies are facing increased regulatory scrutiny. Earlier this year, the Supreme Court upheld the constitutional validity of the 28% GST levy on online real-money gaming. The apex court's ruling supported the government's position on taxation of the sector and cleared the way for tax authorities to pursue pending claims against gaming companies.
While the High Court has granted relief to the founders on the issue of arrest, the ED’s money laundering investigation into the company is expected to continue. The agency may also challenge the High Court’s order before a higher court.
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