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FHRAI calls Oyo’s DRHP representation claim of no criminal proceedings ‘False’

Posted : 11 October 2021 04:29:44 | By TWO Bureau | GNN Bureau

FHRAI calls Oyo’s DRHP representation claim of no criminal proceedings ‘False’

India's apex Hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) has strongly come out against, what it calls, “Oyo’s blatant misrepresentation in its Draft Red Herring Prospectus (DRHP) claiming to not have any outstanding criminal proceedings against it.” FHRAI has stated that hoteliers from across the country have reported several cases about Oyo’s arbitrary cancellation or breach of contract and feels that Oyo should first clear the dues of distressed hoteliers and resolve existing issues with its hotel partners before filing for an IPO.
 
“Oyo has caused immense mental and financial trouble to hotel owners across the country on account of the non-payment of dues. Other than defaulting on payments, Oyo is known for unethical business practices which remain a major concern for small hoteliers. Oyo should first clear the dues of distressed hoteliers and resolve existing issues with its hotel partners. Many small hoteliers do not have the wherewithal to fight against Oyo single-handedly. Insolvency and Bankruptcy Code proceedings against Oyo are still in process and the CCI is investigating the company. Many hoteliers from across the country have filed FIRs and criminal complaints against Oyo for unethical business practices leading to loss of business to their hotels. Oyo in its DRHP has blatantly misrepresented about having no criminal proceedings against it. We have maintained a record of each of our member’s complaints against Oyo and we will build a stronger case to present it to the SEBI and the FM,” said Gurbaxish Singh Kohli, Vice President, FHRAI through a press statement issued a couple of days ago.
 
The FHRAI has stated that based on artificial and inflated valuation, Oyo tries to promote itself as a ‘Great Indian Success Story’. On the back of this narrative, it tries to acquire more funding.  Based on the complaints filed by FHRAI, Oyo is presently under investigation by the Competition Commission of India (CCI). The CCI has identified a case for investigations into Oyo’s business practices under Section 26(1) of the Competition Act, 2002.
 
“The systemic depredation of the budget segment hotel business and its market as a means to achieve notional billion-dollar valuation is a serious cause of concern for the hospitality ecosystem of our country. Right after the pandemic hit the industry, Oyo resorted to manipulating agreements to coerce hoteliers out of it. Hoteliers from across the country are calling out Oyo for its belligerent business practices,” concludes Mr Pradeep Shetty, Jt. Hon Secretary, FHRAI.



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Tags : FHRAI, OYO, DRHP, Hotel Industry,


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