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Oyo asks tourism ministry to cancel membership of FHRAI’s executive committee

Hospitality chain Oyo has requested the tourism ministry to intervene and investigate the running of Federation of Hotel & Restaurant Associations of India (FHRAI) and order eviction of ‘erring’ executive committee members.

In a recent letter to the tourism ministry, a representation by Oyo states that FHRAI’s actions are ‘detrimental’ to small hotel owners. It has also said that constant tussle and their continued ‘malafide’ friction with organized players like Oyo discourages SMEs and entrepreneurs from progressing and moving ahead with times and technology. It has urged the tourism ministry to take ‘necessary action’ against FHRAI’s ‘illegally run’ executive committee and its members who are working for self-interest rather than the interest of the small hotel owners.

The National Company Law Tribunal’s (NCLT) Principal Bench in New Delhi recently issued an order directing the Ministry of Corporate Affairs (MCA) to examine the affairs of the FHRAI and ensure that it complies with the provisions of the Companies Act. The order stated that this was necessary course of action due to a series of litigation that is breeding due to conduct in the affairs of FHRAI. The Tribunal also pointed out that “personal interest has come to loom over the functioning of FHRAI and this has to be curbed”.

Oyo’s letter recounts the findings and order passed by the NCLT’s principal bench which observes that, the object of the FHRAI is to promote the interest of hotels of various regions by encouraging and protecting the hospitality industry in India has been defeated due to petty squabbles time and again.

“Aggregators like Oyo have only enabled the industry in India over the last decade and new age players have democratized travel, made hotels and homes more accessible to guests from around the globe. They have fuelled tourism economy in India’s heartland creating alternative sources of income for many,” the representation by Oyo stated.

“Today an entrepreneur from Ziro Arunachal Pradesh has the same opportunities as one in Mumbai or Delhi. But the present governing body members of the FHRAI, are running a deleterious and malicious agenda aimed towards ruining the interest of hotel industry at large, and creating hurdles and bottlenecks for new players in the market, who are posing a stiff challenge to the self-serving agenda of certain members of the FHRAI with vested interest,” the representation added.

A recent verdict by National Company Law Appellate Tribunal (NCLAT) on the appeal by HRAWI and HRANI against the NCLT order dated August 30, 2022, termed that it was ‘fair and just.’ The verdict termed all administrative decisions by the current executive committee null and void and has asked FHRAI to conduct fresh elections in 30 days. “We further find that the acts of some members of the Executive Committee, who have formed a clique to give shape to their chosen but perverse design are clearly acts of oppression and mismanagement,” said NCLAT in its verdict.Last month, Oyo had said that it had written a letter to the National Company Law Tribunal (NCLT) and has requested the tribunal to expedite the Ministry of Corporate Affairs’ (MCA) investigation on the running of FHRAI and make the same available to the public at large and the members of the hospitality industry.

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