The insolvency proceeding against Oyo’s Ahmedabad subsidiary seems to have opened a Pandora’s box.
What started as an insolvency plea against Oyo Hotels and Homes Private Limited, a subsidiary of the Oyo Group, over alleged non-payment of Rs 16 lakh has now seen claims of more than Rs 160 crore been filed by several creditors against Oyo’s Ahmedabad subsidiary. All these claims are, however, subject to verification.
When the National Company Law Tribunal or NCLT had admitted an insolvency plea filed by Gurugram-based hotelier Rakesh Yadav on March 30 against Oyo’s Ahmedabad subsidiary, it had asked the entity’s creditors to submit their claims with proof to an appointed interim resolution professional by April 15.
Oyo’s subsidiary had challenged the NCLT’s order with the National National Company Law Appellate Tribunal and on April 8, the latter had stayed the formation of a committee of creditors or CoC. However, the court hadn’t stayed the corporate insolvency resolution process or CIRP, meaning that people could still submit their claims.
During a hearing at the NCLAT on Friday (April 16), which was the second hearing in this matter, the court was informed by the interim resolution professional in the case that he had received claims of more than Rs 160 crore against Oyo’s Ahmedabad subsidiary.
“We have received more than Rs 160 crore worth of claims subject to verification. The last date of submitting these claims was April 15 and now we have to assess the merit of these claims. This is what I presented in court today [April 16],” the interim resolution professional in this case, Keyur Jagdishbhai Shah, told Entrackr.
However, in an affidavit filed with the National Company Law Appellate Tribunal on April 15, Oyo’s Ahmedabad subsidiary accused the petitioner, hotelier Rakesh Yadav, of insisting, soliciting and influencing other hoteliers, hotel partners and third parties working with Oyo’s Ahmedabad subsidiary to file intervention applications in his appeal and raise claims against the company.
Entrackr has accessed a copy of Oyo Hotels and Homes’s affidavit.
In its affidavit, the company alleged that Yadav via an audio note was also promoting his lawyers, which it said was against the Advocates Act and Bar Council regulations.
Rakesh Yadav’s lawyers protested against Oyo Hotels and Homes’s claims in the court.
In the hearing on Friday, Oyo tried to get a stay on the insolvency proceedings, Srinivas Kotni, managing partner of the Delhi-based law firm Lexport who is also Rakesh Yadav’s lawyer in the case, told Entrackr.
However, the court yet again refused to stop the insolvency proceedings against the company, consistent with its April 8 order, and gave Yadav’s side three weeks to file their responses to OHHPL’s affidavit.
It is worth noting that for now the Rs 160 crore amount is just in terms of claims by creditors and will have to be verified by Shah. Once these claims are verified, the final amount of the claims can potentially go down.
Oyo declined to comment on our queries on whether the company was aware of the amount of the total number of claims filed in the case since the case is currently subjudice.
In a blog post published on Saturday, Oyo defended its subsidiary by saying that these claims were received by the interim resolution professional as part of the standard process but they aren’t reviewed, assessed, contested or confirmed, or even adjudicated yet.
The IRP Shah told Entrackr that the claims made by the other creditors will be verified after going through the account books of the parties involved.
While the total number of claims filed against Oyo’s subsidiary is unclear, in its blog post the company said that a specific claim of Rs 50 crore was filed by a single claimant for reputational damage.
“This specific claim is already under legal proceedings (name not being disclosed to maintain confidentiality). Needless to mention, such claims are bound to be rejected by the IRP during the process of verification of such claims,” the company said in its Saturday blog post.