Indian hospitality chain OYO on Wednesday claimed that the information that it is filing for bankruptcy is baseless and untrue. The announcement was made by CEO Ritesh Agarwal who tweeted “There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16 Lakhs (USD 22k) from OYO’s subsidiary leading to a petition at NCLT.”
There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16Lakhs (USD 22k) from OYO's subsidiary leading to a petition at NCLT. 1/3
— Ritesh Agarwal (@riteshagar) April 7, 2021
Earlier, several media outlets reported that OYO had filed for bankruptcy under the Insolvency and Bankruptcy Code (IBC), 2016.
The rumour was being propagated due to a complaint filed by a hotel owner in the National Company Law Appellate Tribunal (NCLAT). The NCLAT had accepted the complaint that was filed against OYO’s subsidiary OYO Hotels and Homes Private Limited (OHHPL) which seeks Rs 16 lakh as compensation.
“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”, added Agarwal.
He also shared a document which states that OYO had challenged the NCLAT order against OHHP.
An OYO Sopkesperson said, “We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL a subsidiary of OYO for INR 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.”