OYO's court battle with Zostel on IPO dispute

In the event OYO loses the case against Zostel, the latter will be entitled to 7 percent stake in the company or a settlement of an equivalent amount, said the divisional bench of the Delhi High Court while disposing off the appeal filed by Zostel.

The bench was hearing the appeal which was filed by the erstwhile rival of OYO after a single judge bench of the Delhi High Court dismissed its interim appeal which was restricting OYO from modifying its shareholding by way of an initial public offering.

"Today, learned counsel for the parties are in agreement that a consensual order be passed. Accordingly, with the consent of parties, instead of the impugned judgement and order, it is directed that in the event the respondents' Section 34 petition under the Arbitration and Conciliation Act, 1996 is dismissed and the appellant's Section 36 petition is allowed, then the appellant shall either be issued upto 7 percent shareholding of respondent No.1 or shall be paid value of the said shareholding," said the court order dated March 14.

"With the consent of the parties, it is directed that the learned Single Judge while deciding Sections 34 and 36 petitions shall not be influenced by any observation or finding rendered in the impugned order," it added.

Zo Rooms, which is engaged in a court battle with OYO over a failed merger, had earlier opposed the IPO on the grounds that it violated International Centre for Dispute Resolution regulations and alleging that the company had misrepresented facts about their litigation issue in the DRHP.

The development happens around a time when OYO has announced a major rejig, elevating Ankit Gupta to be the chief executive officer of India and transitioning existing chief executive Rohit Kapoor to the position of company's global marketing head.

Gupta had already been heading the main business of OYO in India - Hotels and Homes and will now also look at Workspaces following this elevation. Kapoor, on the other hand, was the CEO of OYO India & Southeast Asia.

The Southeast Asia charge will now be given to Ankit Tandon, who has been the company's global chief business officer. He will specifically focus on Indonesia and the Middle East region as its CEO.

The timing is crucial as the company has been delaying its much awaited $1.2-billion initial public offer (IPO).