NCLT Initiates Insolvency Proceedings Against OYO Hotels And Homes
The National Company Law Tribunal has ordered the commencement of a corporate insolvency resolution process of OYO Hotels and Homes Pvt., according to a public announcement posted on the IBBI website. An OYO spokesperson said the proceedings are a result of a contractual dispute. It has filed an appeal, the spokesperson said in an emailed statement.
The public announcement states
- The NCLT has ordered the commencement of insolvency proceedings for OYO Hotels and Homes with effect April 1.
- As per standard process, creditors have been called upon to submit claims with proof.
- The last date for submission of claims is April 15.
- The interim resolution professional appointed is Keyur Shah.
The applicant for the filing is Rakesh Yadav, according to information on the website of the Insolvency and Bankruptcy Board of India.
No other details are currently available on the applicant or the reasons for the filing. The OYO spokesperson said the case is a contractual dispute of Rs 16 lakh against the subsidiary.
“We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL a subsidiary of OYO for Rs 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 would refrain from commenting further on the merits of the matter at this stage. We have strong faith and belief in our judicial system.”
- OYO Spokesperson
OYO founder Ritesh Agarwal took to social media to clarify rumours that the company had filed for insolvency.
The year-long suspension on insolvency resolution filings under the IBC expired on March 25. Filings had been suspended to provide relief to businesses impacted by the Covid-19 pandemic. The hospitality sector, in which OYO operates, has been hurting on account of lockdowns and travel restrictions and a slow recovery in economic activity.
OYO Hotels and Homes offers rooms and homes across 800 cities, says its website. The company, once among India’s most celebrated unicorns and funded by investors such as Softbank Group Corp, has witnessed a tumultuous few years on account of expansions gone wrong and then the coronavirus impact.