IPO-bound OYO criticises Zostel's threats of forum shopping

OYO and Zostel disputes reached another high level as the hospitality giant had openly critized Zostel's threats.

The battle between OYO, the tech hospitality giant and Zostel, the hostel chain had reached another high level, as Initial Public Offering (IPO) bound OYO has published an open blog in response to a letter by Zostel that is threatening to curb its IPO readiness actions.

As per to the letter in possession of news agency IANS, the hostel chain had threatened that it "shall be constrained to write to SEBI and/or initiate appropriate proceedings against OYO & OHHPL".

The hostel chain has also said that its shareholders are authorized to 7 percent mirror-image shareholding in the OHHPL (Oyo Hotels and Homes Pvt Ltd) as per the terms of the scheme of demerger of OYO's (Oravel Stays Pvt Ltd) "Indian Business" into the OHHPL is being approved by the NCLT Ahmedabad and so any market offer should only follow implementation of this scheme.

The tech hospitality giant has strike back through its counsel's statement in an open blog, alleging "The petition filed by Zostel seeks reliefs which are beyond the scope of the Award. The Award does not provide any relief that entitles them to seek to freeze OYO's shareholding pattern, in any manner whatsoever."

OYO has further stated in its open blog that till the time,  parties do not enter to an agreement on the terms of the Definitive Agreements and the same are unexecuted, and no right whatsoever had arises in the favour of any party for any type of equities that are to be issued in the tech hospitality giant.

IANS had earlier reported in March about the stretched battle between OYO and Zostel in which the companies are at hostile over an arbitration award.

It was also reported, OYO's contention that the Arbitration Tribunal ruling the dispute between two entities has granted no specific ease to Zostel in terms of receiving ownership in the tech hospitality giant.

This was a result of OYO to call off its acquisition of Zo Rooms quoting the inability to reach an outcome to identify potential value in Zo's business after thorough due diligence.

Zostel has also alleged that it is surprising for them to find that OYO is proceeding to make a initia public offering without complying with the terms of the Award and allotting to the stakeholders the shareholding to which they are entitled.

In response to the letter, the hospitality major has stated in its blog that it condemns Zostel's self-serving misrepresentation of case facts and it is an attempt to overreach Delhi High Court proceedings.

After multiple attempts in the courts and arbitration tribunal, Zostel has continued its efforts to create a wrong speculations which showed that Zostel trying to distract the company from pursuing its business goals.

The hostel chain's letter looks like to be a part of a recent trend of claims being raised on IPO bound companies.

India Scanner News Network

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