The National Company Law Tribunal has initiated insolvency proceedings against a subsidiary of softbank-backed hospitality startup Oyo, a public notice was shown on Tuesday, a decision that said the company challenged it. Oyo is one of SoftBank’s largest bets and the Japanese conglomerate has invested more than $ 1 billion in the company, in which it holds a 46 percent stake. The notice from the National Company Law Tribunal (NCLT) states that it is appointing a resolution professional for Oyo Hotels and Homes Private Limited, a subsidiary of Oyo, and to all creditors to make any claims against the company. Is inviting to present.
Oyo said in a statement that it was surprised by the decision, which has challenged it in the Appellate Tribunal, calling it the result of a contractual dispute over the $ 21,500 claim. Its founder and CEO Ritesh Agarwal said on Twitter, “Oyo has paid off. Under protest .. the epidemic is steadily recovering and our biggest markets are running profitably.” The legal battle ensues when Oyo was already under pressure due to the coronavirus epidemic that has affected the revenues of the hotel and travel industry.
The company has also faced hoteliers in India over unpaid liabilities. Phoenix Legal partner Gautam Bhatikar said that there was a good chance Oyo would win his appeal as he had already paid the claimant the amount. But if that did not happen, Bhatikar said, one risk was that many other creditors might be involved in the resolution process seeking their claims or arrears, which are complicated matters for Oyo. Oyo is one of the largest startups in India, founded by Agarwal in 2013 and booking for budget hotels in India