OYO Dragged To NCLT, Startup Appeals Against Proceeding
The Ahmedabad bench of the tribunal admitted the insolvency plea on March 30, 2021 filed by OYO's creditor Rakhesh Yadav contending that OHHPL has defaulted on an amount of INR 16 lakh
OYO Hotels and Homes Pvt. Ltd (OHHPL) has been dragged to the National Company Law Tribunal (NCLT) by its creditor Rakhesh Yadav contending that OHHPL has defaulted an amount worth INR 16 lakh. The Ahmedabad bench of NCLT admitted the insolvency plea on March 30, 2021.
Meanwhile, Oravel Stays—the parent company of hospitality chain OYO—in an official statement said the amount in question has already been paid by the company and it has appealed against the proceeding.
The tribunal has asked all creditors of OHHPL to submit their claim to the resolution professional by April 15, 2021.
“We are surprised to hear that Hon’ble NCLT has admitted a petition against OHHPL, a subsidiary of OYO, for INR 16 lakh in a contractual dispute, which is not even with this subsidiary. We have filed an appeal,” said the statement by the company.
“The matter is sub-judice and we would refrain from commenting further on the merits of the matter at this stage,” the spokesperson was quoted in the statement.
“Oyo has also appealed with the NCLAT about the matter. OYO has recovered from the pandemic steadily and our largest markets are operating profitably,” said Ritesh Agarwal, founder of Oyo on Twitter.
In 2019, OYO’s total properties grew over 43,000 hotels and offered customers access to over 50,000 vacation homes. The company has also made its foothold strong in South America.
The SoftBank-backed hospitality chain is not a profitable startup and made a loss of $335 million in FY19.