OYO writes to NCLT to expedite inquiry on FHRAI executive committee

Hospitality major OYO, in a recent letter to the National Company Law Tribunal (NCLT), 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).

The travel firm has further requested to make the same available to members of the hospitality industry and the public at large.

Recently, the NCLT’s Principal Bench, New Delhi passed an order where it directed the MCA to look into the affairs of FHRAI and examine whether it conducts itself in a manner compliant with the provisions of Companies Act.

The order also stated that this was a necessary course of action due to a “series of litigation that is breeding due to conduct in the affairs of FHRAI.” The Tribunal further stated that “personal interest has come to loom over the functioning of FHRAI and this has to be curbed.”

In its letter, OYO claims 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.”

“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,” the letter added.

The NCLT, in its earlier order, had observed that “the object of the FHRAI is to promote the interest of hotels of various regions by encouraging and protecting the hospitality industry in India has been defeated due to petty squabbles time and again,” further stating that “personal interest has come to loom over the functioning of FHRAI” and certain members of various regions of FHRAI were breeding litigation for personal reasons.

Through the letter, OYO has questioned the functioning of FHRAI and has also urged to take appropriate action against the erring committee members.

The FHRAI, in November of 2022, claimed to have written to the Securities and Exchange Board of India (Sebi) to bar the hotel aggregator from launching its IPO following a Rs 169 crore fine on OYO by the Competition Commission of India (CCI) for indulging in “unfair business practices.”

The IPO-bound travel tech firm, however, claimed that the FHRAI was misrepresenting the CCI order in a bid to call attention away from the NCLT’s decision to hold the executive committee meeting of the FHRAI as “null and void.”