Hyderabad/Visakhapatnam. A major financial fraud linked to the online gaming and digital payment ecosystem has come to light, where investigators have uncovered the alleged routing of over ₹47 crore through shell companies and UPI networks. Acting on the findings, enforcement agencies have arrested and sent two senior officials of Bengaluru-based Neokred Technologies Private Limited to judicial custody in connection with suspected GST evasion and misuse of financial systems.
A special economic offences court ordered the judicial custody of senior executives Tarun Suresh Nazare (33) and Rohith Reji (30) for 14 days. Both have been lodged in Visakhapatnam Central Jail as investigations continue at a fast pace.
Beginning of the investigation and exposure of a structured network
The Directorate General of GST Intelligence (DGGI) revealed that the case is not limited to a single company but forms part of a larger organised financial network allegedly processing gaming-related transactions without GST compliance.
According to the investigation report, Neokred was operating as a “master merchant” and payment gateway aggregator, onboarding multiple merchant entities and facilitating UPI IDs. These identifiers were allegedly used for transactions linked to online gaming platforms such as Teen Patti, Rummy Master, Dragon, and others.
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Routing through shell companies is worth crores
Investigators found that several shell entities, including Eyebrawn Technologies Private Limited, were created without any real business operations. These entities were allegedly used to route nearly ₹47 crore in suspicious transactions.
The DGGI stated that Eyebrawn alone accounted for the entire ₹47 crore fund flow, with an estimated GST evasion of around ₹13 crore. These entities were allegedly created solely to conceal actual transaction volumes and suppress taxable turnover.
Alleged misuse of UPI and the banking ecosystem
The probe further revealed that Neokred, in collaboration with banking partners including Fino Payments Bank, issued UPI IDs that were allegedly used to collect funds from online gaming activities rather than for declared e-commerce operations.
Authorities claim that payments received from users were directly linked to gaming transactions, while official records listed them as legitimate commercial activities, suggesting systematic financial misrepresentation.
Serious allegations about the company’s role
The DGGI report states that Neokred controlled critical processes, including merchant onboarding, KYC verification, API integration, and transaction routing. However, it allegedly failed to carry out proper due diligence and risk assessment.
Investigators have accused the company of either negligence or deliberate involvement in onboarding merchants with no genuine business activity, enabling the flow of illicit transactions.
Search operations and digital evidence
During raids conducted on April 17 at Eyebrawn’s premises, investigators found that the company was completely non-operational and existed solely to route funds. Subsequent searches on April 20 at Neokred’s offices led to the recording of statements from senior officials.
However, according to the agency, the officials allegedly provided vague responses and did not fully cooperate during questioning.
Possibility of a larger financial network
Enforcement agencies believe that the case extends beyond tax evasion and involves a complex network of online gaming platforms, fintech companies, and banking APIs.
Such systems allegedly use transaction layering and multiple shell entities to obscure the actual flow of funds, making detection and tracing significantly difficult.
Legal provisions and strict action
The DGGI informed the court that the offence falls under the CGST Act and is cognisable and non-bailable, carrying a punishment of up to five years of imprisonment along with monetary penalties.
Expert warning on systemic risks
Cyber and financial crime expert and former IPS officer Prof. Triveni Singh warned that such cases pose a serious threat to the digital financial ecosystem. He stated, “The convergence of online gaming and fintech systems has created vulnerabilities that are being exploited for large-scale financial manipulation. Misuse of shell merchants and payment gateways highlights the urgent need for stronger regulation and real-time monitoring mechanisms.”
Ongoing investigation
Authorities are now probing the extent of the network across multiple states and examining whether other banking and fintech entities are involved. The case highlights critical weaknesses in India’s rapidly expanding digital payments infrastructure, underlining the need for stronger regulatory oversight alongside technological growth.
