FIR filed against Oyo founder Ritesh Agarwal by Bangalore hotelier for fraud and cheating

The Whitefield police in Bengaluru have booked hotel chain OYO Hotels and Homes’ CEO and founder Ritesh Agarwal for cheating and criminal breach of trust following a complaint by a city-based hotelier. Following which an FIR was filed against Agarwal.

But now, Bengaluru-based Bruhat Bangalore Hotels Association has reportedly contacted the Bengaluru police commissioner to conduct an investigation against Indian hospitality unicorn OYO. According to Economic Times, The Bruhat Bangalore Hotels Association, which claims it is a permanent invitee to the advisory panel of the department of tourism in the Karnataka government wrote to the commissioner of police in the city to conduct an investigation against Oyo last week. The association has stated in its letter that owing to the "unfair business practices of Oyo" receivables and losses to hoteliers in Karnataka amount to hundreds of crores.

The Bruhat Bangalore Hotels Association reportedly said in its letter to the commissioner, “owing to the unfair business practices of OYO receivables and losses to hoteliers in Karnataka amounts to hundreds of crores.” The Association in its letter stated that Oyo has been making wilful misuse of its dominant position and their technology to deliberately falsify booking data and cheating the hoteliers by modifying data and withholding substantial amounts.

PC Rao, president of the association and vice president of the Karnataka Hoteliers Association told Economic Times, “We also met the additional commissioner of police last week and it was conveyed to us that appropriate action will be taken. We have received complaints from our members against the company and we want to ensure it does not become a big scam. It is not just our association members, but we believe no hoteliers should suffer. We have informed all our members to be careful.”

An OYO spokesperson denied the allegation and earlier told Inc42, “We strongly refute the claims made in the complaint that has been wrongfully filed against our Founder and two other office bearers, basis false claims and exaggeration on a regular commercial dispute.”

Oyo's spokesperson told the Free Press Journal, “We would like to clarify that there is no formal complaint but a letter that has been submitted by three individuals who run an association the Bruhat Bangalore Hotels Association that primarily caters to the restaurant owners in the area. Important to note that none of these individuals are OYO Hotel owners, and neither does the association represent OYO owners. It is also important to note, we currently work with 350+ owners (600 properties) in Bangalore alone, and have an industry-leading retention rate of over 97%. Having said that, while vested interest groups are creating unnecessary public uproar to sensationalize the matter, real OYO asset owners that are facing issues, if any, are reaching out to find solutions and get back to running the business. They are focused on finding ways to improve customer experience and thereby their occupancy and profitability.”

“As always, we continue to engage with our asset owners, as for vested interest groups such as this, we would like to request them to focus on driving the next wave of growth in the hospitality industry, by having a long term view of situations as against sensationalizing matters to defame a brand that has been built over the years with the hard work of thousands of young OYOpreneurs, asset owners and millions of customers. We urge them to focus on creating great living experiences for millions of middle-income people across India, and in the process support the Government’s mission to drive tourism in the country and also create additional job opportunities for young hospitality enthusiasts in the country,” said Oyo's spokesperson.

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Free Press Journal