After CCI and NCLAT, Federation of Hotel & Restaurant Associations of India (FHRAI) is taking its fight with Oyo to NITI Aayog.
FHRAI said it has submitted a representation to NITI Aayog which highlights the hospitality industry’s ‘plight’ with reference to Oyo’s business model that has caused ‘irreparable damages’ to the hospitality eco-system in the country. It is also planning to submit a separate representation against the company to the newly inducted tourism minister G Kishan Reddy in a meeting on Friday, Pradeep Shetty, joint honorary secretary, FHRAI told ET.
“We have submitted a representation and we are planning to meet Mr Amitabh Kant about Oyo. We want to express our concerns to NITI Aayog because we heard of certain endorsements being done by NITI Aayog in favour of Oyo and it was on the point of applauding Oyo’s work around Covid. So we want to make it clear that none of this happens at their cost. It happens at the cost of hotel owners,” he said and added: “This is nothing but an image building exercise. There is so much skirmish and agitation against the company after Covid. We are concerned about that and the market distortion and all the flouting of contractual obligations. It is a pattern. Our members are also planning to file separate NCLT petitions after the NCLAT order,” Shetty said. FHRAI said it has specifically pointed out in its representation that certain recent activities conducted by Oyo to earn goodwill have actually come at the expense of partner hotels. It said it has shared copies of FIRs filed by hotel owners across the country with NITI Aayog.
Oyo and Kant did not respond to an email seeking comments till the time of going to press.
“We are requesting for a meeting with Shri Amitabh Kant for devising a system or policy to safeguard vulnerable hotel and lodge owners from all parts of India. FHRAI has data of hundreds of such hotels that have reported payment defaults and other unethical business practices by Oyo. In the interest of the hospitality sector we want to bring to attention Oyo’s unscrupulous business practices that have annihilated the livelihood, investments and entrepreneurial initiatives of thousands of hoteliers from the mid and lower segment,” said Gurbaxish Singh Kohli, vice president, FHRAI.
FHRAI has also alleged that Oyo has not disclosed its balance sheets for 2019-20 and 2020-21 and has not complied with the statutory filing requirements.
“The company has existing loans of around $300 million… As per Oyo’s financial statement for the period April 2018 to March 2019, it has registered a net loss of Rs 36.72 crore for the year ending March 2018 and a net loss of Rs 102.97 crore for the year ending March 2019. Their fund mobilization drive is based on an overvalued asset proposition so that they are able to manage their bad debts through this,” Kohli said.
