Bengaluru hotelier files case against Oyo founder, 6 others

Bengaluru hotelier files case against Oyo founder, 6 others
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5 Nov, 2019

Bengaluru-based Roxel Inn’s owner Betz Fernandez has filed a complaint against budget hospitality chain Oyo Hotels and Homes, alleging that the company has not cleared its payments.

Fernandez has alleged that Oyo committed to pay Rs 7 lakh to the hotel every month as a minimum guarantee. However, since May this year, Oyo has not fulfilled its commitment and has ignored payment requests, a press statement said.

“In the beginning, everything appeared like smooth sailing and, the terms and conditions of the agreed partnership were met diligently. But then, this lasted only for a few months. Gradually things changed with tweaks in the contracts that are favorable to them and now they have just completely stopped paying. After many attempts to remind and reason with them, I am forced to take this step,” said Elister Fernandez, chief executive officer, Roxel Inn.

Police has asked Oyo’s Ritesh Agarwal, chief executive officer, and six other executives to appear before the sub-inspector of Police on November 7, 2019. The executives include Rohit Srivastava, head of south, Madhvendra Kumar, head business development, Gourab De, head business development and in-charge of property and Prateek Agarwal, Manjeet Singh and Mrinmoy Chakraborty from finance.

Gurugram-based Oravel Stays Private Limited, which operates branded budget hotels marketplace Oyo, is under competition watchdog Competition Commission of India (CCI) scanner after a hotel body, Federation of Hotel and Restaurant Associations of India (FHRAI), complained against its business model. 

“Under the garb of generating more business, Oyo has been arm-twisting the small and budget segment hoteliers for quite some time now. CCI’s order to investigate Oyo is a big breakthrough and the FIR registered against them by the Bangalore hotel owner is the first of many by other hoteliers across the country,” said Gurbaxish Singh Kohli, president, Hotel and Restaurant Association of Western India (HRAWI) and vice president, FHRAI.

Last week, the Competition Commission of India (CCI) had cleared Oyo of market dominance and predatory pricing allegations.

In its defence, Oyo says it will file a counter-complaint against the Bengaluru based hotel owner, according to media reports.