FHRAI urges SEBI to reject Oyo's DRHP and suspend IPO
Oyo on October 1 filed its DRHP with SEBI for raising Rs 8,430 crore through an IPO.
The Federation of Hotel and Restaurant Associations of India (FHRAI) has sent a letter to market regulator SEBI asking it to suspend hospitality startup Oyo's initial public offer (IPO) process.
FHRAI claims that Oravel, the parent company of Oyo, has been involved in "unfair, anti-competitive and fraudulent dealings and business practices, which include entering into anti-competitive agreements as well as abusing its dominant position," as per the letter, a copy of which CNBC TV 18 has seen.
Oyo on October 1 filed its DRHP with SEBI for raising Rs 8,430 crore through an IPO. Oyo did not comment till the time of filing this story.
In the letter, FHRAI has cited an ongoing investigation by the Competition Commission of India (CCI) against Oyo, stating that SEBI’s approval to the proposed PIO “would set a very bad precedent and gravely prejudice the interest of the investors.”
Apart from alleging that, Oyo is engaged in "anti-competitive business practices", FHRAI also said that there was a lack of disclosure of litigation and criminal proceedings against the company in the draft prospectus.
FHRAI has also cited the proceedings in the Supreme Court by a hotel owner against the NCLAT’s decision to close insolvency process against an Oyo subsidiary. FHRAI says that over 113 claimants had filed their claims with the Interim Resolution Professional, with claims over Rs 160 crore.
The development comes days after Zostel sent a letter to SEBI claiming that Oyo's DRHP is "illegal" since it is in contravention of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018".
(Edited by : Bivekananda Biswas)
First Published: Oct 25, 2021 3:25 PM IST
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