Bengaluru: Medical technology company Medikabazaar’s investors have filed an indemnity claim, or compensation, of ₹279 crore against the company over allegations of financial misreporting last year.
“The Parent has received a communication from its Series C investors on an indemnity claim of INR 27,870 lakh ( ₹279 crore) for the past period misreporting. The Parent has been legally advised that it has a reasonable case to not accept the claim,” the consolidated FY23 financial statement of Boston Ivy Healthcare Solutions Pvt Ltd, the parent company of Medikabazaar, showed.
In July last year, Mint reported that Medikabazaar’s founders Vivek Tiwari and Ketan Malkan may not be awarded the stock options due to them this year as a fallout of financial discrepancies that have surfaced, in yet another instance of corporate misgovernance among Indian startups.
The company has also ousted its former chief executive officer Tiwari from the board over allegations of fraudulent and malicious activities, according to the financial statement filed with the Registrar of Companies.
“Mr. Vivek Tiwari is involved in malicious and fraudulent activities, including those of financial mismanagement and financial fraud, which have caused irreparable harm and damage, and are alarming to the well-being of the company,” the statement showed.
“On blowing of whistle and investigations (each of the abovementioned shareholders have reviewed the investigation reports prepared by Uniqus India Private Limited, Alvarez n Marshal and M/s Rashmikant and Partners), it was concluded that he has breached his fiduciary duty along with committing gross negligence, misappropriation, misstatements and breach of trust against the Company and its shareholders and committed acts of financial mismanagement and financial fraud,” it added.
The company’s board is contemplating cancelling the management stock options that were due to the founders at the end of June, expecting Medikabazaar to not meet its revenue and operational earnings targets for 2023-24, according to three people familiar with the development.
Medikabazaar joins a growing list of Indian startups that have faced governance issues. Companies such as Trell, BharatPe, Byju’s, and GoMechanic have faced audits from jittery investors over the past two years.
The company has raised a total of $165 million (about ₹1,380 crore) via debt and equity financing. The company was reportedly in talks to raise another $150-200 million earlier this year, but that did not materialise after the forensic audit was conducted.
Among its investors are Creaegis, the World Bank’s International Finance Corporation, Lighthouse India Fund, HealthQuad, Ackermans & van Haaren, and CDC Group.
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