OYO faces allegations of 'daylight heist' over bonus share ballot

Mumbai, Nov 1 Fintech founder Mohit Gang has accused hospitality chain OYO Rooms of attempting a "daylight heist" as retail investors are being scammed through a postal ballot that would issue bonus Compulsorily Convertible Preference Shares.

In a post on X, Gang said that OYO's postal ballot on October 27 proposed three measures: increasing authorised capital, issuing bonus CCPS, and granting sweat equity.

He claimed that a scam lay behind the second measure of issuing bonus CCPS, as the three-day response window was intended to lead retail shareholders to overlook the notice, resulting in them receiving lower-value Class A CCPS that convert one-for-one into equity.

In contrast, insiders, promoters and institutional investors opting for Class B could benefit from more favourable conversion terms linked to hiring merchant bankers for an IPO.

For Class A investors, who take no action on the postal ballot, one share will be allotted for every 6,000 existing shares.

Class B, available by opt-in, could convert at significantly better ratios, potentially providing thousands of additional shares per 6,000 holdings if merchant bankers are appointed, Gang said.

"Class B is the clear winner here and a no-brainer choice. Because the upside is huge with very little downside. If they appoint Merchant bankers, one is eligible for extra 1109 shares for every 6000 shares held. That is a neat 18.5 per cent upside," his X post read.

"Simply a classic daylight corporate heist.

Capitalmind AMC CEO Deepak Shenoy also took to X following Gang's allegation, writing: "Please be aware if you are a shareholder."

OYO plans to file its Draft Red Herring Prospectus (DRHP) in November for a $7-8 billion valuation for its IPO.

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