Nationwide Firm Legislation Tribunal has initiated insolvency proceedings in opposition to a subsidiary of Softbank-backed hospitality startup Oyo, a public discover confirmed on Tuesday, a call the corporate stated it had challenged. Oyo is one in every of SoftBank’s largest bets and the Japanese group has poured greater than $1 billion into the corporate, wherein it owns a 46 per cent stake. The Nationwide Firm Legislation Tribunal (NCLT) discover stated it was appointing a decision skilled for Oyo’s subsidiary, Oyo Lodges and Properties Pvt Ltd, and welcoming all collectors to submit any claims it might have in opposition to the corporate.
Oyo stated in a press release it was shocked by the choice, which it has challenged within the appellate tribunal, describing it because the fallout of a contractual dispute over a declare of $21,500. “Oyo has paid that below protest ..Oyo is recovering from the pandemic steadily and our largest markets are working profitably,” its founder and CEO, Ritesh Agarwal, stated on Twitter. The authorized battle comes when Oyo was already below stress because of the coronavirus pandemic which has hit lodge and journey business revenues.
The corporate has additionally confronted a backlash from hoteliers in India over unpaid dues. Gautam Bhatikar, companion at Phoenix Authorized, stated there was a superb likelihood Oyo would win its attraction given it had already paid the quantity to the claimant. But when that did not occur, Bhatikar stated, there was a danger that many different collectors may be a part of the decision course of looking for their claims or dues, complicating issues for Oyo. Oyo is one in every of India’s largest startups which was based by Agarwal in 2013 and aggregates bookings for India’s funds accommodations