OYO challenges insolvency petition in NCLT against subsidiary; refutes bankruptcy claims

Founder and CEO of hospitality chain OYO, Ritesh Agarwal on Tuesday clarified rumours claiming that OYO had filed for bankruptcy calling it 'absolutely untrue and inaccurate.' Taking to Twitter, the OYO CEO revealed that its parent company Oravel Stays had challenged the order of the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against OYO Hotels and Homes Private Limited (OHHPL) for an amount of 16 lakhs.

"OYO has paid that under protest and amount already banked by the claimant. OYO has also appealed with the NCLAT about the matter. OYO is recovering from the pandemic steadily and our largest markets are operating profitably," he said.

The NCLT had admitted the insolvency plea against OHHPL on March 30, 2021, and had asked OHO Hotels and Homes Private Limited to submit their claims with proof before April 15. “The creditors of M/S OYO Hotels and Homes Private Limited are hereby called upon to submit their claims with proof on or before 15th April 2021 to the interim resolution professional,” according to the order. The body had also appointed has appointed advocate Keyur Jagdishbhai Shah as the interim resolution professional for the dispute.

In its appeal, OYO has categorically stated that the 16 lakh under protest has already been paid by OYO to the claimant adding that it was 'surprised' that the NCLT had admitted the petition against OHHPL in the first place.

“We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL a subsidiary of OYO for Rs 16 lakh in a contractual dispute, which is not even with this subsidiary. 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 said in an official statement.