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Sunday, April 11, 2021

OYO moves NCLAT to challenge insolvency plea against subsidiary

The initiation of insolvency against the subsidiary led to incorrect reports claiming that the entire OYO group had filed for insolvency.

By: ENS Economic Bureau | New Delhi |
April 8, 2021 4:15:48 am
Oyo, Oyo bankruptcy, OYO hotels bankruptcy, OYO hotels bankruptcy case, Ritesh Agarwal bankruptcy, Oyo newsOyo Hotels founder Ritesh Agarwal. Photographer: Akio Kon/Bloomberg

Hospitality chain OYO has approached the National Company Law Appellate Tribunal (NCLAT) against an order of the Ahmedabad Bench of National Company Law Tribunal (NCLT) admitting an insolvency petition against OYO Hotels and Homes Private Limited (OHHPL), a subsidiary of the parent group.

The Ahmedabad Bench of NCLT had on April 1 admitted an insolvency plea against OHHPL after a creditor approached the tribunal claiming a default of Rs 16 lakh. The NCLT admitted the plea and appointed an interim resolution professional to manage the day-to-day proceedings of the company. It had then also asked all creditors to submit their claims with proof on or before April 15.

The initiation of insolvency against the subsidiary led to incorrect reports claiming that the entire OYO group had filed for insolvency. On Wednesday, Ritesh Agarwal, the group chief executive officer of the hospitality chain denied the reports and said that a claimant had sought Rs 16 lakh from its subsidiary, which led to the case at NCLT.

“OYO has paid that under protest and amount already banked by the claimant,” Agarwal tweeted. In a statement later, the company said it was surprised the NCLT had admitting a petition against OHHPL for a contractual dispute, it also said that it would “refrain from commenting further on the merits of the matter” since the matter was sub-judice.

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