MUMBAI/BENGALURU: Oyo has challenged an order from the National Company Law Tribunal (NCLT), which admitted a plea for corporate insolvency proceedings against the company’s subsidiary Oyo Hotels & Homes, which houses the India business.
Oyo founder & CEO Ritesh Agarwal took to Twitter to describe the charges as “untrue and inaccurate”. The matter is expected to be heard in the appellate tribunal on Thursday.
Sources aware of the matter said the order’s origin goes back to a disputed amount of Rs 16 lakh between Oyo and a hotel owner, Rakesh Yadav, with regard to the ‘minimum guarantee’ that Oyo provides to owners. Oyo used to offer a minimum amount per month to property owners regardless of the business the property did. Agarwal said Oyo has already paid this money to Yadav, a hotelier who runs his facility in Sector 17C Gurugram, “under protest” and that the amount has been banked by the claimant.
The order passed by NCLT Ahmedabad said Oyo failed to pay the benchmark revenue partially for July and August 2019 and then defaulted on the entire sum between September and November 2019. Keyur Shah, appointed independently by NCLT, said Yadav filed an application for his pending dues in early 2020, before the pandemic, when the default threshold for invoking insolvency proceedings was Rs 1 lakh. This threshold was raised to Rs 1 crore in March 2020 to prevent triggering of proceedings against MSMEs facing the Covid-19 heat.
After the notice was put out, there were other claims from operational and financial creditors. “Some hoteliers have come forward but they are not as per the IBC format. So we are yet to get proper claims,” Shah told TOI.
Agarwal’s tweet on Wednesday said: “Oyo has also appealed with the National Company Law Appellate Tribunal (NCLAT) about the matter. Oyo is recovering from the pandemic steadily and our largest markets are operating profitably.” He said he was surprised by NCLT’s admission of the petition.