BEIJING, March 3 (Xinhua) — The rapidexpansion of Indian economy hotel chain OYO has raised doubts about the health of the softbank-invested company by using questionable tactics to build its domestic business,media reported. The report quoted OYO chief executive Ritesh Agarwal, as well as current and former employees, as saying the company was exaggerating the number of rooms on its website by including rooms in unavailable hotels. Many of these rooms come from unlicensed hotels and guesthouses.
To avoid the authorities getting into trouble for this inappropriate practice, the start-up reportedly sometimes offered free accommodation to local police and other officials.
OYO also refused to pay the hotel all of their arrears, based on interviews with hotel owners and employees, as well as emails, legal complaints and other documents, the report said.
OYO was founded by Agarwal in 2013 when he was 19. Since then, OYO has grown rapidly into more than 80 markets and is expanding its U.S. business.
OYO is now one of India’s most promising start-ups, valued at $10 billion. Agarwal owns 30 per cent of the company.
SoftBank is one of OYO’s major shareholders, with other investors including Sequoia Capital India and Lightspeed India Partners.