BusinessTrending Now

FHRAI seeks rejection of Oyo’s proposed public issue from SEBI

New Delhi: The Federation of Hotel and Restaurant Association of India (FHRAI) has urged the SEBI to halt the proposed listing of Oyo claiming misrepresentation in the draft prospectus.

The development comes weeks after former rival of Oyo, Zostel, which has been embroiled in a more than five-year-long legal battle, sought the regulator’s intervention against the IPO of the home grown hospitality company.

In its October 22 letter, FHRAI claimed that Oravel Stays, the parent company of Oyo, is engaged in anti-competitive business practices.

The FHRAI, which claims to have 55,000 hotels under its umbrella, and Oyo are locked in an intense battle. Based on the complaints filed by hotels body, Oyo is under investigation by the Competition Commission of India (CCI). The CCI has identified a case for investigation into Oyo’s business practices under Section 26(1) of the Competition Act, 2002.

“There has been no stay of the order dated 28.10.2019 and the investigation of the director general remains pending and is known to be at an advanced stage,” the FHRAI said in its complaint to the Securities and Exchange Board of India (SEBI).

“The DRHP filed by Oravel fails to disclose that there has been no stay on the prima facie findings of the CCI that Oravel violated the provisions of the Competition Act, nor is there any stay on the investigation initiated by the Director General in relation to the same,” it said.

Last week, a hotelier also filled complaint against Oyo, claiming misrepresentation in the draft prospectus.

A partnership firm called Jagadish has alleged that Oyo faltered on payments, neglected property maintenance leading to damages and abandoned the hotel properties without proper termination of the agreement. It has claimed that Oyo is due to pay him Rs 10 crore.

Oyo on the other hand said that this was one of the few cases of disagreement with a hotel partner. This dispute was sub-judice and had been adequately disclosed in the DRHP.

Leave a Reply

Your email address will not be published. Required fields are marked *