Rs 278 Cr Indemnity Claim, Inflated GMV, Board Ouster: Inside the Medikabazaar Controversy

Audit Uncovers Financial Irregularities

The controversy began with a forensic audit conducted by PwC, which revealed that Medikabazaar had overstated its Gross Merchandise Value (GMV) by over 50% in FY23. The company reportedly recorded gross order values as net sales, leading to inflated revenue figures. In FY23, Medikabazaar reported revenues of approximately $181 million, nearly double the previous year's figures, primarily due to this accounting practice. ​

As per various media accounts, further investigations by Uniqus India, Alvarez & Marsal, and law firm Rashmikant & Partners concluded that Tiwari had allegedly breached his fiduciary duties, engaged in gross negligence, and was involved in financial mismanagement and fraud. These findings led to his removal from the company's board.

Also Read: Medikabazaar To Raise Rs 200 Crore In Series B Funding

Investor Backlash and Legal Actions

In response to the findings, Medikabazaar's Series C investors filed an indemnity claim of Rs 278.7 crore (approximately $33.5 million) for financial misreporting in previous periods. The company, however, stated that it has been legally advised to contest the claim.

Additionally, the Income Tax Department conducted searches at Medikabazaar's offices in June 2022 and issued multiple tax notices, including a Rs 2.5 crore demand for FY22, which the company paid under protest. Auditors also issued a qualified opinion due to missing records for assets and inventories worth over Rs 80 crore, highlighting poor internal financial controls, reports Inc42 Media.

Leadership Changes and Company Response

Following the audit revelations, Tiwari stepped down as CEO in 2024 and was replaced by Dinesh Lodha, formerly associated with Samsung India. Despite stepping down, Tiwari remained on the board until his removal in April 2025. ​

According to a recent media report in Money Control, in a public statement, Tiwari denied all allegations, stating, "I categorically deny all allegations of fraudulent conduct or intentional misrepresentation during my tenure as CEO. The claims suggesting my involvement in any alleged inflation of revenue figures are misleading and do not reflect the reality of the situation." ​

Company Background and Future Outlook

Medikabazaar, founded in 2015, has raised over $190 million from investors such as Creaegis, Lighthouse India, HealthQuad, and CDC Group. The company was valued at approximately $700 million following a $65 million Series D funding round in 2022. ​

The recent controversies have placed Medikabazaar under intense scrutiny, with stakeholders closely monitoring the company's efforts to rectify governance issues and restore investor confidence.