After CCI Finding Oyo In Contravention Of The Law, FHRAI Re-Initiates Request To SEBI To Bar The Hotel Rooms Aggregator’s IPO Efforts
New Delhi, Nov 15: On the backdrop of the recent penalty imposed by the Competition Commission of India (CCI) on Oyo, India’s apex hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) has
New Delhi, Nov 15: On the backdrop of the recent penalty imposed by the Competition Commission of India (CCI) on Oyo, India’s apex hospitality Association – Federation of Hotel & Restaurant Associations of India (FHRAI) has submitted a representation to the Chairman of the Securities Exchange Board of India (SEBI) requesting it to stop/bar the hotel rooms aggregator’s efforts towards floating an IPO with immediate effect. The Association has informed and updated SEBI about the judgement passed by the CCI holding Oyo responsible for anti-competitive business practices.
Last year, FHRAI had written to SEBI specifically requesting to suspend Oyo’s IPO process to protect the interests of thousands of hotels as well as the general public. The Association has brought to the attention of the market regulator about Oyo’s systemic depredation of the budget segment hotels, causing serious distress to the hospitality sector of the country. FHRAI has outlined the key findings of the CCI in its letter to the SEBI and has implored it to stop Oyo’s efforts towards floating an IPO.
In 2019, FHRAI had filed a complaint against Oyo and MMT-Go with the CCI. The CCI found the aggregators to be in contravention of the law and recently announced a penalty of Rs.168.88 Cr on Oyo and Rs.223.48 Cr on MMT-Go. The aggregators were found to be indulging in predatory pricing, exorbitant and unfair commissions, misrepresentation of information and arbitrarily levied service fees. The Association expects the CCI order to serve as an eye-opener for investors as well as for the market regulator about Oyo’s unethical business practices.
FHRAI has stated that Oyo is responsible for the systemic depredation of the budget segment hotel business and its market as a means to achieve a notional billion-dollar valuation which is a serious cause of concern for the hospitality ecosystem of the country. Now that Oyo has been found guilty of indulging in anti-competitive and unfair business practices thereby affecting the business of small hotels and suppressing competition, it is imperative that its IPO should not be allowed in the interest of the hospitality sector, consumers and potential investors. We hereby request SEBI to stop/bar OYO’s IPO efforts with immediate effect, the Association stated.
About Federation of Hotel & Restaurant Associations of India (FHRAI):
The Federation of Hotel & Restaurant Associations of India (FHRAI) is the apex body of the Indian Hospitality industry. Founded in 1955, the FHRAI is the third-largest Hospitality association in the world and has diligently built on its rich legacy. The Association is today privileged to serve as the leading voice of the hotel and restaurant industry and plays a seminal role in supporting the growth trajectory of India’s hospitality and tourism sector. FHRAI provides a vibrant interface between the industry, government, regulatory bodies, academia, international organizations, civil society and the media.