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Oyo Challenges Bankruptcy Case at NCLT | India News

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MUMBAI / BENGALURU: Oyo has challenged an order from the National Company Law Court (NCLT), which admitted an application for business insolvency proceedings against the subsidiary of the company Oyo Hotels & Homes, which hosts the business in India.
Oyo founder and CEO Ritesh Agarwal took to Twitter to describe the charges as “false and inaccurate.” The matter is expected to be heard in the appeals court on Thursday.
Sources familiar with the matter said that the origin of the order dates back to a disputed amount of Rs 16 lakh between Oyo and a hotel owner, Rakesh Yadav, regarding the ‘minimum guarantee’ that Oyo provides to the owners. Oyo used to offer a minimum amount per month to owners, regardless of the business the property did. Agarwal said that Oyo already paid this money to Yadav, a hotelier who manages its facilities in Sector 17C Gurugram, “under protest” and that the claimant has deposited the amount in a bank.
The order approved by NCLT Ahmedabad said Oyo partially failed to pay the benchmark revenue for July and August 2019 and then defaulted on the lump sum between September and November 2019. Keyur Shah, independently appointed by NCLT, said Yadav filed a request for its outstanding dues in early 2020, before the pandemic, when the default threshold for invoking insolvency proceedings was 1 lakh rupees. This threshold was raised to Rs 1 crore in March 2020 to prevent the activation of proceedings against MSMEs facing the heat of Covid-19.
After the notice was published, there were other claims from operational and financial creditors. “Some hoteliers have come forward but they don’t agree with the IBC format. So we still have to get the proper claims, ”Shah told TOI.
Agarwal’s tweet on Wednesday read: “Oyo has also appealed to the National Company Law Appeals Court (NCLAT) on the matter. Oyo is steadily recovering from the pandemic and our largest markets are operating profitably. ”He said he was surprised by the admission of the petition by NCLT.

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