OYO writes to NCLT seeking action against erring FHRAI executive committee members

Travel tech firm OYO has written to the National Company Law Tribunal alleging that FHRAI members are fighting tooth and nail to "intimidate and harass" the hotel industry and urged it to take action against "erring" executive committee members of the hospitality industry body.

An email sent to the Federation of Hotel & Restaurant Associations of India (FHRAI) seeking comments did not elicit a response.

OYO, in its representation to NCLT, alleged that the present members of FHRAI are "fighting tooth and nail to harass, intimidate and harass the entire hotel industry in the country and the FHRAI is being run totally contrary to its aim and objectives as well as its intents".

It further claimed that if the present executive committee members of FHRAI are permitted to continue this behaviour, the Indian tourism and hospitality sector will be severely affected.

"This would eventually have a cascading effect on the growth of the tourism industry in India and certainly the economy of the country, which is still recovering from the situation caused by the Covid-19 pandemic," OYO said in the letter to NCLT.

It requested the tribunal to consider the issues raised in the representation and "direct the FHRAI governing body members to work in a fair manner for the furtherance of the cause of the hotel industry and in line with the directions of this Tribunal and the MCA, to take appropriate action against the erring committee members."

The National Company Law Tribunal (NCLT), in a recent order, held the executive committee meeting of hotel and restaurant body FHRAI on October 30, 2018 as "null and void" and ordered the election of its new president after conducting the annual general meeting.

NCLT had also observed that the objective of FHRAI was to promote the interest of hotels of various regions by encouraging and protecting the hospitality industry in India and it has been defeated due to petty squabbles.

OYO, in the letter to NCLT, requested the tribunal to expedite the Ministry of Corporate Affairs' (MCA) investigation on the running of FHRAI.

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

In November, the FHRAI had said it has written to SEBI to stop OYO from launching its IPO in the wake of a penalty imposed by the Competition Commission of India (CCI) on the hospitality and travel-tech firm for unfair business practices.

OYO, however, said the FHRAI is misrepresenting the CCI order and the letter to Securities and Exchange Board of India (SEBI) was to distract attention from the executive committee meeting of FHRAI being held as 'null and void' by the NCLT, which has also ordered a court-monitored AGM of the hospitality industry body.

In October this year, CCI slapped penalties totalling more than Rs 392 crore on online travel firms MakeMyTrip, Goibibo, and hospitality services provider OYO for indulging in unfair business practices.