Hotels body seeks police probe against Oyo
The association has stated in its letter that owing to the "unfair business practices of Oyo" receivables and losses to hoteliers in Karnataka amount to hundreds of crores.
The Bruhat Bangalore Hotels Association, which claims it is a permanent invitee to the advisory panel of the department of tourism in the Karnataka government wrote to the commissioner of police in the city to conduct an investigation against Oyo last week. The association has stated in its letter that owing to the "unfair business practices of Oyo" receivables and losses to hoteliers in Karnataka amount to hundreds of crores.
In its letter, a copy of which ET has seen, the association-which claims it has over 1800 members across hotels and restaurants- stated that Oyo has been making wilful misuse of its dominant position and their technology to deliberately falsify booking data and cheating the hoteliers by modifying data and withholding substantial amounts.
“We also met the additional commissioner of police last week and it was conveyed to us that appropriate action will be taken. We have received complaints from our members against the company and we want to ensure it does not become a big scam. It is not just our association members, but we believe no hoteliers should suffer. We have informed all our members to be careful,” said PC Rao, president of the association and vice president of the Karnataka Hoteliers Association.
In a response to ET’s query, Oyo said ‘barring a couple’, none of the association members have Oyo partners as members and that the association primarily caters to the restaurant owners in the area.
Rao said more than 100 members are Oyo partners and that while some members are still continuing with Oyo, some have ended agreements recently. “We are fighting for all the hoteliers not just our association members.”
An Oyo spokesperson said the company currently works with 350+ owners (600 properties) in Bangalore alone, and that it has an “industry leading retention rate of over 97%.”
Oyo’s lawyers referred to the FIR dispute ‘as a routine commercial matter’ and urged all stakeholders to ‘have faith in the legal machinery.’
An Oyo spokesperson said the company has 'full confidence' that these allegations will be proven false, and that it is seeking appropriate judicial redress and that it should have an update on the matter in the next couple of days.
“This is a routine commercial matter that the contract between Oyo and complainant requires mandatorily to ask for arbitration. The individual is, however, taking advantage of Ritesh’s public persona to get his five minutes of fame and to defame the brand. We would request want all stakeholders to have faith in the legal machinery and not sensationalise the matter,” said Jeevan Ballav Panda, partner, Khaitan & Co.
In his complaint to the Bengaluru Police, Natarajan VRS had accused Agarwal and his colleagues of continuous criminal acts of fraud, cheating and misappropriation of 80% of the revenue share due to his hotel from June 2017 until August 2019. Other executives named were Oyo chief operating officer Abhinav Sinha, chief financial officer Abhishek Gupta, president of corporate affairs Siddhartha Dasgupta and two Bengaluru-based employees.
Oyo had previously refuted the allegations made in the police complaint calling those “false claims” and the case an “exaggeration” of a regular commercial dispute.