Tax authorities carry out surprise search at one of Oyo's offices
“There is a routine TDS survey in progress in one of our offices. We are cooperating with the authorities, and are committed to engaging with all relevant stakeholders,” an Oyo spokeswoman said.
It was however not clear what prompted the search and Oyo also chose not to elaborate on it.
The news comes at a time when Oyo’s major shareholder SoftBank faces renewed investor scrutiny after being forced to bail out one of its best known portfolio companies, the cash-burning, office-sharing firm WeWork, for about $10 billion last year.
SoftBank is, in fact, getting squeezed by a sell-off in many of its listed bets which has put a spotlight on founder Masayoshi Son’s strategy of pouring billions of dollars into unproven, money-losing startups.
The latest development also adds to the SoftBank-backed hotel chain’s challenges as it faces backlash from some hotel owners in India who say they have been blindsided by hidden fees.
In November, internal projections showed Oyo’s India business is likely to make losses until 2021.
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