Zostel Hospitality, the parent company of Zo Rooms, has asked the Securities and Exchange Board of India (SEBI) to suspend the initial public offering (IPO) of Oravel Stays, which runs OYO, according to a report by Moneycontrol.com. The complaint argues that the Draft Red Herring Prospectus of OYO contains "misstatements" and "inadequate disclosures", the report added. “The matter of Zostel’s shareholding in OYO is subjudice and in case the Delhi High Court’s decision comes in Zostel’s favour then it will change the shareholding of the company rendering the DRHP invalid,” Zostel’s legal counsel was quoted as saying by Inc42. Zostel's complaint is the latest salvo in a protracted battle between the two companies. OYO is banking on its public offer proceeds to settle debt running into thousands of crores. A suspension, if granted, can prove to be detrimental for the company’s business growth which has suffered heavily due to the ongoing COVID-19 pandemic. Timeline of Zostel's dispute with OYO April, 2015: OYO sued Zo Rooms, which was Zostel’s hyperlocal hotel rooms booking platform, over theft of copyright material. The Delhi High Court issued a stay order against ZO Rooms then. December, 2015: The companies then started exploring a potential acquisition as reports emerged that OYO was looking to take over Zostel. September, 2016: The planned deal, also confirmed by Softbank, with Zostel fell through as OYO officially put an end to it. Oyo said that Zostel had misled it on revenue, while Zostel claimed that, among other things, Oyo stole a…
Zostel cries foul over ‘inadequate disclosures’ in OYO’s proposed IPO
Zostel and OYO have been at loggerheads since 2015 when OYO sued Zo Rooms over theft of copyright material.
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