FHRAI writes to Sebi to stop OYO from launching IPO after CCI penalty | Mint
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Business News/ Companies / News/  FHRAI writes to Sebi to stop OYO from launching IPO after CCI penalty
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FHRAI writes to Sebi to stop OYO from launching IPO after CCI penalty

OYO said the FHRAI is misrepresenting the CCI order and the letter to Sebi is to distract attention from the executive committee meeting of FHRAI being held as null and void by the NCLT

Federation of Hotel & Restaurant Associations of India on Tuesday said it has written to Sebi to stop OYO from launching its IPO (REUTERS)Premium
Federation of Hotel & Restaurant Associations of India on Tuesday said it has written to Sebi to stop OYO from launching its IPO (REUTERS)

The Federation of Hotel & Restaurant Associations of India (FHRAI) on Tuuesday said it has written to market regulator Securities and Exchange Board of India (Sebi) to stop OYO from launching its initial public offering (IPO).

This comes at a time when the Competition Commission of India (CCI) imposed penalty on the hospitality and travel-tech firm for unfair business practices.

However, OYO said that FHRAI is misrepresenting the CCI order and the letter to Sebi is to distract attention from the executive committee meeting of FHRAI being held as null and void by the NCLT, which has also ordered a court-monitored AGM of the hospitality industry body.

In October, CCI slapped penalties of more than 392 crore on online travel firms MakeMyTrip, Goibibo, and hospitality services provider OYO for indulging in unfair business practices.

"Now that OYO has been found guilty of indulging in anti-competitive and unfair business practices thereby affecting the business of small hotels and suppressing competition, it is imperative that its IPO (Initial Public Offering) should not be allowed in the interest of the hospitality sector, consumers and potential investors," FHRAI said in a statement.

Further, the association said it has requested "Sebi to stop/bar OYO's IPO efforts with immediate effect".

The hospitality industry body alleged that "OYO is responsible for the systemic depredation of the budget segment hotel business and its market as a means to achieve a notional billion-dollar valuation which is a serious cause of concern for the hospitality ecosystem of the country."

When contacted, a spokesperson of OYO said, "FHRAI is also completely misrepresenting the CCI order, by claiming (the aggregators were) 'found to be indulging in predatory pricing, exorbitant and unfair commissions, misrepresentation of information and arbitrarily levied service fees'. We hope that the regulator takes note of this wilful misrepresentation of its order."

"FHRAI is again resorting to making incorrect sensational statements" to distract attention from "the fact that NCLT has held the executive committee meeting of FHRAI as null and void, has ordered fresh elections and has ordered a court-monitored AGM in the presence of a nominee of the court," the spokesperson said.

In October 2021, OYO filed preliminary papers with Sebi to raise 8,430 crore through an initial share sale. The compnay it has not launched an IPO, citing the volatile nature of the market.

FHRAI said in 2019, it had filed a complaint against OYO and Make My Trip-Goibibo with the CCI and alleged that OYO's systemic depredation of the budget segment hotels caused serious distress to the hospitality sector of the country.

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Published: 15 Nov 2022, 09:53 PM IST
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