In the context of the recent sanction imposed by the Indian competition watchdog, the Competition Commission of India (CCI) on hotelier Oyo, the Federation of Hotel and Restaurant Associations of India (FHRAI) has Submitted a representation to the chairman of the Stock Exchange Board of India. (SEBI) requesting that you prevent the hotelier’s efforts to launch an initial public offering (IPO) with immediate effect.
The association claims to have informed and updated SEBI about the judgment handed down by CCI holding Oyo liable for anti-competitive business practices. Last year, FHRAI had written to SEBI requesting that OYO’s IPO process be halted to protect the interests of many hoteliers in the country.
According to a statement, this association had drawn the attention of the market regulator to the “systemic depredation” of hotels in the economy segment by OYO. These actions were causing serious problems for the country’s hotel sector, argues FHRAI.
He also outlined CCI’s key findings in his letter to SEBI and implored it to stop OYO from launching its IPO.
The earlier FHRAI complaint
In 2019, FHRAI had filed a complaint against Oyo and MMT-Go with the ICC. The CCI found that the aggregators were in contravention of the law and recently announced a fine of Rs 168.88 crore on Oyo and Rs 223.48 crore on MMT-Go. These aggregators were found to indulge in predatory pricing, exorbitant and unfair commissions, misrepresentation of information, and arbitrarily charged service fees.
“Now that Oyo has been found guilty of engaging in unfair and anti-competitive business practices, affecting the small hotel business and suppressing competition, it is imperative that its IPO not be allowed in the interest of the hospitality industry, consumers and potential investors We hereby request SEBI to stop/prohibit OYO’s IPO efforts with immediate effect,” the association stated.