Oyo writes to NCLT to expedite MCA inquiry on FHRAI executive committee

Hospitality chain Oyo said on Thursday that it has written a letter to the National Company Law Tribunal (NCLT) and has requested the tribunal to expedite the Ministry of Corporate Affairs’ (MCA) investigation on the running of Federation of Hotel & Restaurant Associations of India (FHRAI) and make the same available to the public at large and the members of the hospitality industry.

In August last year, NCLT’s principal bench, New Delhi had passed an order wherein it directed MCA to look into the affairs of FHRAI and examine if it conducts itself in a manner compliant with the provisions of Companies Act. The order also stated that this was the necessary course of action due to a series of litigation that is breeding due to conduct in the affairs of FHRAI. The Tribunal had also stated in its order that personal interest has come to loom over the functioning of FHRAI and that this has to be curbed.

Oyo stated in its representation that 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 interest.” Oyo said in its letter to NCLT, it has questioned the functioning of FHRAI and has also urged NCLT to take appropriate action against the erring committee members.

FHRAI has raised concerns regarding Oyo in the past.

In November last year, the National Company Law Appellate Tribunal (NCLAT) admitted Oyo’s appeal against a Competition Commission of India (CCI) order imposing a Rs 169-crore penalty against the hospitality company.

It’s listed for hearing in April.

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The CCI order was passed in a case filed by FHRAI against MMT-Go and Oravel Stays (Oyo). CCI had imposed a penalty of Rs 169 crore on Oyo and Rs 223.48 crore on MMT-Go besides directing MMT-Go to amend its market behaviour for indulging in anti-competitive conduct.
Oyo said on Thursday that in its letter to NCLT it has also stated that the issues concerning FHRAI are a ‘worrisome’ development for the business environment of the country.

“Various government machineries have launched a concerted effort to improve the ease of doing business in India and efforts are being made to make our country a more business friendly destination. It does not augur well for the business environment of our country when prominent start-ups, being universally acclaimed for their drive and innovation are the subject of such concerted and intimidatory tactics launched by the present committee of FHRAI, across multiple forums with the sole malicious intent to harm the hotel industry of the country, whose interest such organisations espouse.” Oyo stated in its letter.

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