NEW DELHI: Amidst brewing tension between IPO-bound hospitality firm Oyo and one of India’s oldest hospitality lobbying bodies FHRAI, the former recently wrote to the Ministry of Tourism and requested intervention and investigation in the running of Federation of Hotel & Restaurant Associations of India (FHRAI) and order the eviction of erring executive committee members.
The representation by OYO says that FHRAI’s actions are detrimental to small hotel owners. It added that constant tussle and their continued malafide friction with organised players, discourages entrepreneurs from progressing and moving ahead with time and technology.
“The present governing body members of the FHRAI, are running a deleterious and malicious agenda aimed towards ruining the interest of hotel industry at large, and creating hurdles and bottlenecks for new players in the market, who are posing a stiff challenge to the self-serving agenda of certain members of the FHRAI with vested interests,” said OYO.
The firm also pointed out the National Company Law Tribunal’s (Principal Bench in New Delhi) recently issued an order which directed the Ministry of Corporate Affairs (MCA) to examine the affairs of the FHRAI and ensure that it complies with the provisions of the Companies Act.
When contacted, Pradeep Shetty, President of, Hotel and Restaurant Association of Western India (HRAWI) & Executive Committee Member of FHRAI said that a making entity (Oyo) with several cheating and tax evasion cases / FIR’s against it is trying to point fingers at them.
“Oyo should have rather tried to address FHRAI’s concerns and tried to resolve its members’ complaints rather than make a futile attempt at intimidating/threatening the Hotel Industry apex body executive committee members for having brought Oyo’s unethical business conduct to the notice of various authorities and exposed its malpractices,” said Shetty.
Jaison Chacko, Secretary General, FHRAI said, “Based on enormous number of complaints received from our members about large scale breach of contracts, default of payments, unilateral cancellation of agreements and other fraudulent activities committed by Oyo, FHRAI approached appropriate authorities including the CCI, NCLT, NCLAT, SEBI and Government of India against Oyo’s oppressive and unethical business practices.”
Chacko added, “Whatever actions FHRAI took were for the benefit of its members and were also well within the provisions of law. FHRAI’s position has been vindicated by the recent orders of CCI, NCLAT and SEBI. It would have been desirable if Oyo would have tried to counter FHRAI’s allegations and tried to clear the pending dues of hundreds of hotel partners.”
Oyo and FHRAI have been at loggerheads for quite some time now. In November, the FHRAI had written to SEBI to stop OYO from launching its IPO in the wake of a penalty imposed by the Competition Commission of India (CCI).
In October this year, CCI slapped penalties totalling more than R 392 crore on online travel firms MakeMyTrip, Goibibo, and OYO for indulging in unfair business practices. CCI had launched its investigation after a complaint by the FHRAI.