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In a shocking turn of events, the NCLT had ordered to commence the insolvency proceedings against OYO Hotels and Homes Pvt. Ltd (OHHPL), a unit of hotel aggregator Oyo Rooms, over a dispute regarding payments worth Rs 16 lakh. For the same, NCLT had ordered the creditors of OHHPL to submit their claims by April 15 to an IRP. Ahmedabad-based Keyur Jagdishbhai Shah who is part of corporate legal advisory firm Keyur J. Shah and Associates has been appointed as the interim resolution professional for the same.
On the matter, Founder and CEO Ritesh Agarwal said that the company had not filed for bankruptcy. He called the reports “absolutely untrue and inaccurate”. In a statement to the public, he said, “We are surprised to hear that the Hon'ble NCLT has admitted a petition against OHHPL, a subsidiary of OYO for INR 16 Lakhs in a contractual dispute, which dispute is not even with this subsidiary. We have filed an appeal. The matter is sub-judice and we refrain would from commenting further on the merits of the matter at this stage. We have strong faith and belief in our judicial system.”
His Tweet:
There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16Lakhs (USD 22k) from OYO's subsidiary leading to a petition at NCLT. 1/3
— Ritesh Agarwal (@riteshagar) April 7, 2021
The company has challenged the NCLT order and also said that the disputed amount has already been paid to the claimant.
Other controversies with OYO
This is the second time that someone has filed for OYO's bankruptcy. In 2020, Conclave Infratech had reportedly filed an insolvency application against Oravel Stays Pvt Ltd over unpaid dues. Further, Oyo has also been in the cross hairs of some of its hotel partners. These hotel partners allege that the hotel aggregator is following unfair business practices. Thus, a bunch of them have snapped ties with the hotel chain over the past 3 years.