Edelweiss Financial Services to Appear Before ED on 15th January
Edelweiss Financial Services Ltd says that it has received a communication from the Enforcement Directorate (ED) and would appear before the investigation agency on Wednesday, 15 January 2020. 
 
In a regulatory filing, the financial services provider says, "...the company has received a communication from the office of the ED to represent and appear before them on 15 January 2020 and the company shall do the needful."
 
Last week, the company had accepted that it had received a communication from the ED to appear and provide information about Edelweiss group companies' dealings with a company called 'Capstone Forex Pvt Ltd'. However, it says none of its companies have any transactions with Mumbai-based Capstone Forex, named in the Rs2,000 crore forex scam. 
 
At 12.54pm Tuesday, Edelweiss Financial Services was trading marginally down at Rs109.10 on the BSE, while the 30-share Sensex was flat at 41,868.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Oyo dismisses thousands of its employees in India, China
    Ritesh Agarwal-led Indian hospitality unicorn Oyo, currently the second top unicorn after Paytm and valued at nearly $10 billion in the country, has acted tough by laying off thousands of employees in India and China, after Japanese giant SoftBank tightened its noose around it.
     
    According to Asia Times, the company has let go about 1,200 employees in India "and plans to shed a similar number in the next four months".
     
    According to Oyo, it is lying off poor performers and has set up a "meritocracy-based" performance evaluation programme.
     
    Attempts for a detailed statement from the company on the current controversy went unanswered.
     
    According to reports, SoftBank has given Oyo a deadline of March 31, 2020 to phase out contracts or businesses, which are not EBITDA-profitable. 
     
    The company has a deadline to post positive Earnings before interest, tax, depreciation and amortization (EBITDA) for its self-operated hotels and July as the deadline for positive EBITDA of its ancillary businesses.
     
    "The decision to layoff such a huge number of employees can also be attributed to the plans of Oyo to list publicly in the US within the next three years," the report added.
     
    Founded in 2013, Oyo's self-operated business includes Oyo Townhouse, Silverkey, Collection O, Oyo Flagship and Oyo Homes and ancillary businesses include Weddingz.in.
     
    SoftBank's Vision Fund has so far invested about $1.5 billion in Oyo, pushing the hospitality company's valuation to $10 billion but learning from WeWork fiasco, the Japanese conglomerate is now looking at the companies it financially back from a different lens. 
     
    Also backed by Airbnb Inc., Sequoia Capital and Lightspeed Venture Partners, Oyo currently works with 10,000 hotel owners in the country.
     
    A New York Times report recently quoted current and former Oyo employees as saying that the company was "indulging in questionable business practices". 
     
    The article claimed the "SoftBank Jewel in India" is facing toxic culture and troubling incidents. "While Ritesh Agarwal's Oyo aims to be the world's biggest hotel chain, its growth was fuelled by questionable practices, employees said," as per the report.
     
    The hospitality chain denied the allegations, saying it is committed to "growing the right way" by meeting the needs of property owners and guests.
     
    "With regard to complaints of a small section of property owners in India whose payments are disputed, multiple escalation mechanisms exist and we continue to provide resolution," said the company.
     
    The company reported a loss of Rs 2384.69 crore in the financial year 2019 -- a 5.5 times jump from Rs 360.42 crore loss in the previous financial year. 
     
    "We are committed to growing OYO the right way -- by meeting the needs of property owners and of the guests we serve together. We work hard every day to ensure that our values are upheld by thousands of committed employees around the world, and we are subject to regular external audits to ensure proper compliance and adherence to our Code of Conduct," an Oyo spokesperson said in a statement earlier this month.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Meenal Mamdani

    2 weeks ago

    This debacle at OYO happened because SoftBank loaded it with money that it did not have the capacity to absorb in a meaningful fashion.
    SoftBank had a ton of money, courtesy Saudi Arabia, that it was keen to park in promising companies.
    OYO was dazzled by the attention and the mega funds and expanded rapidly before it had created a work culture and made its modus operandi and brand reliable.
    Now SoftBank will chalk it up to a poor bet. OYO CEO will admit to his mistake and move on to the next venture which is not uncommon among entrepreneurs and the failure is even a badge of honor among this select group.
    The ones who will suffer are the employees, young and old, who will suddenly become unemployed.

    Rashesh Shah Denies Any Association between Edelweiss and Sanjay Shah
    Rashesh Shah, chairman and chief executive (CEO) of Edelweiss group has refuted media reports about relations between Sanjay Nathalal Shah and the group. 
     
    In a letter, Mr Shah, says, "Media reports suggest that Sanjay Nathalal Shah, chartered accountant (CA) and an independent director of a few of our group companies, is alleged to be connected to Capstone (Forex Pvt Ltd). Let me reiterate that he has no other association with the Edelweiss group, nor is he in any way related to me; you will appreciate that Shah is a common name."
     
    Mr Shah from Edelweiss also said the group would take appropriate legal action against the media group that had published alleged links between Sanjay Shah and Edelweiss group.
     
    Commenting on the summons from Enforcement Directorate (ED) in the Rs2000-crore forex scam involving Capstone Forex, Mr Shah reiterated that Edelweiss has no relations with Capstone Forex and all allegations of Foreign Exchange Management Act (FEMA) violations are false. 
     
    "While it is unfortunate that I was unable to go in person to the ED, our senior authorised representative did attend in person with the requisite information. Needless to say, if in the future any assistance or support to the investigation is requested from us, we will cooperate fully," he added.
     
    At 1.17pm Monday, Edelweiss Finance Services Ltd was trading 4.8% up at Rs111.05 on the BSE, while the 30-share Sensex was also marginally up at 41,808.
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