Ritesh Agarwal, founder and CEO of OYO, on Wednesday denied reports that the hotel start-up had filed for bankruptcy. The reports followed a petition admitted into NCLT for 16 lakh in contract litigation against one of OYO’s subsidiaries.
Reacting to a series of tweets and a document circulated on social media, Mr Agarwal said in a tweet: “There is a PDF and SMS in circulation which claims that OYO has filed for bankruptcy. It is absolutely false and incorrect. An applicant seeks 16Lakhs INR (22,000 USD) from the OYO branch, which led to a petition to NCLT. “
He added that OYO had paid the amount, which had already been banked by the plaintiff “under reserve”. OYO challenged the NCLT order against its subsidiary (OHHPL) for an amount of ₹ 16 lakh.
“OYO is regularly recovering from the pandemic and our largest markets are operating profitably,” Mr. Agarwal said.
According to a statement posted on Twitter by Mr. Agarwal, this is not the first time that a petition has been accepted by the NCLT for a new age company. “Flipkart had a similar case in February 2020 where the court of a small operational creditor authorized the NCLT petition but it was quickly quashed by NCLAT,” he said.
A spokesperson for OYO added: “We are surprised to learn that the Hon’ble NCLT has admitted a petition against OHHPL, a subsidiary of OYO for 16 lakh in a contract dispute, which is not even with this subsidiary. We have filed an appeal. The case is pending and we will refrain from commenting further on the merits of the case at this time. We strongly believe in our justice system. “