The Federation of Hotel and Restaurant Association of India (FHRAI) on Wednesday told the National Company Law Appellate Tribunal (NCLAT) that hospitality firm Oyo has assets in excess of Rs 300 crore as of FY2019 and that it is no longer a startup.
The company is currently fighting alleged claims of over Rs 200 crore by multiple hotel owners who say they are operational creditors.
The comments of FHRAI, which has intervened in the insolvency case against Oyo, came after NCLAT judge Justice Anant Bijay Singh on Monday remarked that the Insolvency and Bankruptcy Code, 2016 (IBC) needs a separate provision for startups that have no assets.
"Oyo is not a startup anymore as per definition under the Commerce Ministry, since its revenues were above Rs 100 crore as of FY2019," the counsel for FHRAI, Krishnendu Dutta said.
He added that the company’s assets, including tangible and intangible, are in excess of Rs 300 crore.
As per filings sourced from Tofler, Oyo's parent company Oravel Stays Pvt Ltd had seen consolidated operating revenues of Rs 6,430 crore in FY19. It had reported total assets worth nearly Rs 1,000, which included physical plant and equipment of Rs 293 crore.
Oyo did not comment on FHRAI's statement in the NCLAT.
Oyo's counsel advocate Mukul Rohatgi had on Monday questioned the role of the intervenors in the matter, and particularly hit out at FHRAI. "How can the Federation of Hotel and Restaurant Association of India, which is an association of 1000 hotels, be an operational creditor? FHRAI is Oyo’s rival," he said.
Rohatgi, who appeared for the Softbank-backed company, told the NCLAT that most of the claims against Oyo are not credible.
"I am informed that of the alleged Rs 225 crore claims against Oyo by alleged operational creditors, the Insolvency Resolution Professional (IRP) has found prima facie only Rs 13 lakh," Rohatgi said.
However, the IRP is yet to reveal the details of the total amount claimed by creditors. The IRP did not comment on the statements made by Oyo’s counsel.
Oyo has settled the matter with a Gurgaon-based hotel owner that had initially dragged the company to NCLT over non-payment of dues of Rs 16 lakh.
However, several other creditors have now intervened in the matter. This includes the Federation of Hotel and Restaurant Association of India (FHRAI), which represents several hotels across the country.
The NCLAT now has to decide on whether the complaints of intervening creditors should be admitted, given the original party has sought to withdraw the case.
The NCLAT judge had earlier commented on how an insolvency case can proceed against a company which has no brick-and-mortar assets. "The IBC should take into consideration separate provisions for startups and unicorns. Oyo is a startup but has no property. Even if there is liquidation, there will be nothing. There can be no conventional solution for startups under IBC," he remarked
The matter has now been placed for orders in July.
(Edited by : Kanishka Sarkar)