The studio behind Puzzle & Dragons alleges that a former executive misappropriated $2.35 million from company funds
Image credit: GungHo Online
GungHo Online Entertainment, known for the game Puzzles & Dragons, accused a former senior executive of embezzling ¥346 million, equivalent to $2.35 million, through falsified orders and misuse of company money.
According to a August 14, 2025, statement (referencing Automaton), the company stated the former executive carried out these acts over several years by issuing fake work requests (via Google Translate).
The firm's statement explained that suspicions led to an initial probe by outside legal and accounting experts to assess the misconduct and establish facts.
Through this examination, it was discovered that around ¥246 million ($1.67 million) was misappropriated using a job-ordering service falsely identifying the ex-executive as a contractor.
Additionally, further losses accounted to ¥100 million ($680,000) came from unsubstantiated payments to a business affiliate, stated GungHo.
An investigation team composed of two external auditors and supported by outside forensic experts was set up by GungHo to delve into the matter through interviews and digital forensics.
The team looked into potential similar incidents, focusing on root causes and preventative strategies.
The executive faced termination on July 24, 2025, due to this alleged fraudulent behavior.
GungHo asserted that the misdeeds were independently conducted maliciously by the senior executive, who exploited their authority to disguise and avoid exposure.
The company is in discussions with criminal investigation authorities about pressing charges and is fully cooperating in ongoing probes.
To protect the integrity of the investigation, detailed misconduct disclosures will be withheld for now.
The company extended apologies for any inconvenience the incident caused but anticipated only slight effects on financial outcomes for the period ending March 31, 2026.
GungHo is dealing with a shareholder uprising and has scheduled a special general meeting for September 24, 2025, where shareholders will decide on the potential removal of CEO and president Kazuki Morishita.