Oyo Files For Bankruptcy? Here Is The Shocking Truth & Oyo Founder’s Message
Since the last 24 hours, social media and startup world is abuzz with very serious news: Oyo Rooms has filed for bankruptcy.
Is this true? What is the truth?
Keep reading to find out more..
No, Oyo Hasn’t Filed For Bankruptcy: Oyo Founder
First, let’s be clear about this news. Oyo Rooms hasn’t filed for bankruptcy.
This was clarified by Oyo Rooms’ founder Ritesh Agarwal, as he tweeted: “There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate.”
In a series of tweets, he explained what actually has happened:
There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking INR 16Lakhs (USD 22k) from OYO's subsidiary leading to a petition at NCLT. 1/3— Ritesh Agarwal (@riteshagar) April 7, 2021
But Case Against Oyo Has Been Admitted By NCLT
As per YourStory, National Company Law Tribunal (NCLT) has admitted a case against Oyo Rooms, wherein the petitioner has demanded ‘commencement of corporate insolvency proceedings’ against OYO Hotels and Homes Pvt Ltd (OHHPL), which is a subsidiary of Oyo Group.
It seems that Oyo Rooms hasn’t paid an amount of Rs 16 lakh to the petitioner, which triggered him/her to file a case with NCLT, that has been admitted.
However, Oyo Founder claims that the amount has been paid to the petitioner, and in response to the NCLT petition, Oyo has filed a counter-petition with National Company Law Appellate Tribunal (NCLAT), which challenges the order passed by NCLT to proceed with insolvency against OHHPL.
A spokesperson from Oyo said to YourStory: “We are surprised to hear that the Hon’ble NCLT has admitted a petition against OHHPL, a subsidiary of OYO for Rs 16 lakh in a contractual dispute, which dispute is not even with this subsidiary. We have filed an appeal. The matter is sub-judice and we would refrain from commenting further on the merits of the matter at this stage.”
As per the Insolvency and Bankruptcy Code 2016 (IBC), a corporate insolvency case against a company can be initiated, in case of a financial dispute amounting to more than 1 crore or more.
But here, the disputed amount is Rs 16 lakh, and Oyo claims to have paid that.
This is a developing story, and we will keep you updated as more details come in.