Mayhem at Arthmate after Vihaan Kumar’s arrest: COO resigns, employees exodus, and more

A nearly two-year-long legal tussle with Gameskraft has pushed SaaS-based lending enabler Arthmate into utter chaos, including the arrest of its co-founder and former chief executive officer CEO, a top executive’s resignation, and employee exodus. 

Gameskraft co-founder and chief financial officer Ramesh Prabhu lodged a complaint with Gurugram Police (Sector 29) on September 2022, which led to an FIR being registered in March 2023, accusing Arthmate co-founder and former chief executive Vihaan Kumar of financial irregularities and fraudulent activities. 15 months after the FIR, Kumar was arrested by the police and Economic Offences Wing (EoW) on June 10, 2024, according to a court order accessed and reviewed by Entrackr.

For the uninitiated, Gameskraft is one of the top profit generating startups from India which reported Rs 1,062 crore profit in FY23 with Rs 2,662 crore revenue. Arthmate is a digital lending platform that deploys credit services across fintechs and SME sectors. The firm recorded Rs 132 crore of revenue with profits of Rs 5.5 crore in FY23. 

“Vihaan’s arrest created a stir at the Gurguram-based firm which saw an exodus of employees including its chief operating officer Renu Satti,” said one of the sources requesting anonymity. Satti, former Paytm Payment Banks CEO, joined the company in February this year. 

While her LinkedIn profile still shows her as COO at Arthmate Finance, sources confirm that she has resigned (after Vihaan’s arrest). 

Responding to Entrackr queries, an Arthmate spokesperson said that Kumar has no association with the company.  “As the matter is sub-judice, we cannot comment on it at the moment,” said a Gameskraft spokesperson.

Queries sent to Satti on Monday over WhatsApp did not elicit any response. We will update the story in case they respond. 

The heart of the matter

Now coming back to charges leveled by Gameskraft’s Prabhu against Vihaan Kumar: Kumar entered into Gameskraft with the promise of making investments in the company, but slowly gained the confidence of the board intending to control its operations, as per the court order.

Vihaan suggested restructuring the board of directors under his so-called investment strategy and also positioned his people as the key members of the Gameskraft board. He also apparently started representing himself as a founder and investor of Gameskraft, holding meetings with third parties, including consulting firms like E&Y and PWC, and government officials, the court order added.

Vihaan introduced service providers and contractors like Fly Tech, Ginni Tech, Skytech, Synx, and others to GamesKraft without the consent of the original promoters, said the court order. These firms allegedly burdened Gameskraft with financial losses due to undelivered or over-invoiced services, as per the FIR details.

Kumar’s actions had caused a financial loss of approximately Rs 12.15 crore to Gameskraft, including unpaid GST amounts that had already been remitted to the fraudulent service providers. Based on these allegations, the Gurugram police and Economic Offence Wing (EoW) filed an FIR for criminal breach of trust, cheating, forgery, using forged documents, and criminal conspiracy.

Vihaan Kumar allegedly used entities including Arthmate Tech P2P Financial Private Limited and Clear Though Advisors for alleged forgery, as per the court order. His close aides Vijay Kumar Dhanuka and Hitesh Bhansali represented Vihaan at Gameskraft. Dhanuka is head of operation and treasury at Arthmate for four years whereas Bhansali worked with the company as its grievance and nodal officer.

Kumar also served as a co-Founder at Arthmate Finance, according to sources, but Entrackr could not verify this independently.

No relief for Kumar, for now

Vihaan Kumar was arrested on June 10, 2024, at his office premises in Gurugram. However, Kumar’s counsel contested that his arrest was illegal and challenged it in the Chandigarh High Court. The court, however, declined to offer any relief and rejected his claims on August 30, 2024. Kumar continues to be in prison until the court grants him a bail.

The incident places the spotlight yet again on the impact the actions of a few can have on a firm. In Arthmate’s case, significant size and profitability has not been enough to shrug off the issues created by Kumar, indicating an outsized influence on the firm, for all their protestations to the contrary. A broader employee exodus in particular looks bad, indicating a deeper rot than just an aberration at the top. If the company does manage to arrest and slide and get back on track, one suspects it will still have to contend with the Kumar issue.