NCLAT orders stay on CoC formation in proceedings against subsidiary: Oyo

OYO said the NCLAT has ordered a stay on the formation of committee of creditors in proceedings under the Insolvency and Bankruptcy Code against its subsidiary Oyo Hotels and Homes Pvt Ltd

Hospitality firm OYO on Thursday said the National Company Law Appellate Tribunal (NCLAT) has ordered a stay on the formation of committee of creditors in proceedings under the Insolvency and Bankruptcy Code against its subsidiary OYO Hotels and Homes Pvt Ltd (OHHPL).

Earlier, the National Company Law Tribunal (NCLT) had admitted a petition for initiating insolvency proceedings against OHHPL for recovery of Rs 16 lakh, an order that the hospitality firm challenged before the appellate tribunal on Wednesday.

"Closing@riteshagar's thread from yesterday - Today NCLAT has admitted our plea and ordered a stay for the formation of COC in IBC proceedings against OHHPL, an OYO subsidiary. The claimant has already drawn the INR 16 Lakhs which we paid under protest," OYO said in a tweet.

In a tweet, OYO founder and group CEO Ritesh Agarwal said, "I am so grateful to everyone for their support on social media since yesterday (Wednesday). Thank you for discouraging misleading news and forwarded msgs".

Agarwal on Wednesday had rubbished the reports thatthe company had filed for bankruptcy.

"There is a PDF and text message circulating that claims OYO has filed for bankruptcy. This is absolutely untrue and inaccurate. A claimant is seeking Rs 16 lakh (USD 22,000) from OYO's subsidiary leading to a petition at NCLT," he had tweeted.

As per the insolvency and bankruptcy law, any creditor can take a company for insolvency over unpaid dues. Once a petition is admitted by the NCLT, a resolution professional or RP is appointed who examines the claims of creditors and supervises the sale of the company to help settle such claims.