On Wednesday, Justice C Harishankar of the Delhi High Court (HC) did not give a direction on the combined pleas by Oyo and Zostel (Zo Rooms) over a botched acquisition deal.
The HC will hear the matter next on October 7.
While Oyo has challenged the
SC-appointed arbitrator’s order passed originally in March over the dispute, Zostel moved an application late last month seeking to restrict Oyo from modifying its shareholding structure or cap table, including by way of an IPO.
ET was the first to report on Wednesday that
Zostel had approached the HC seeking redressal in a dispute related to a buyout agreement dating back six years. This has come at a time when Oyo is planning to file the DRHP soon for its $1-$1.2 billion IPO.
Oyo has lined up lawyers Mukul Rohtagi and Harish Salve to argue the case, while Amit Sibal is representing Zostel.
Sibal, during the court proceedings on Wednesday, said Zostel does not intend to stop Oyo’s IPO but requested the court whether Oyo shares could be put in an escrow account till an outcome on the arbitrator award challenged by Oyo is in place.
This will ensure that Zostel’s rights are protected over a 7% stake in Oyo it believes it should get, Sibal argued.
Oyo’s lawyers contested the claims in a brief discussion on Wednesday.
Oyo’s legal counsel, in a statement to ET, said, “The petition filed by Zostel seeks reliefs that are beyond the scope of the award. The award does not provide any relief that entitles them to seek to freeze Oyo’s shareholding pattern, in any manner whatsoever or create an escrow account. Oyo’s stand is that this petition is not maintainable and in any case without merit.
“They (Oyo) are still looking to file DRHP with markets regulator Sebi by this week,” a person aware of the matter said. However, it might spill over to the next week, the person added.
Oyo told ET that the adjournment of today’s hearing has no impact on corporate actions ongoing at Oyo.
“We strongly believe that Zostel’s interim relief has extremely weak legal standing. A similar relief of freezing Oyo’s shareholding was rejected earlier by the arbitration proceedings,” the statement said. Oyo said this is a ‘part of a pattern by Zostel to distract Oyo from pursuing its business goals.’.
Zostel’s legal counsel did not offer comment on the court proceedings.
Oyo added the arbitration award, which the company has challenged, did not provide any shareholding to Zostel (in Oyo), and that Zostel has chosen not to appeal the award, but is trying to slip in a non-maintainable interim relief.
If Oyo ends up filing its DRHP in the coming days, it would be joining a growing list of startups like
Paytm,
PolicyBazaar, and
Nykaa that have filed for an IPO here this year.
ET reported last week that Oyo was
aiming at a valuation of over $12 billion in its IPO and majority of its public issue would be through a fresh issuance of shares.
Oyo was last valued at $9.6 billion in September and a 7% stake in it would be valued at around $672 million.
