The Delhi High Court has rejected Zostel’s plea for a 7 per cent stake in OYO ahead of the initial public offering (IPO). A single-judge bench of the Delhi High Court, including Justice C Hari Shankar, passed the declaration today. Zo Rooms which has been fighting a legal battle with Oyo had filed a plea in the High Court seeking protection of its rights against the company. On account of this shareholding conflict, Zostel was trying to stop Oyo from moving with its IPO process. This attempt by Zostel was rejected in today’s ruling.

Zo claims that it finished its commitment under the agreement and transferred the business, but Oyo failed to transfer 7 per cent to its shareholder. In March last year, almost three years after the deal between the two companies collapsed. A Supreme Court-appointed arbitrator had said that Oyo was in breach of its agreement to purchase Zo Rooms. The agreement between the two companies was expected to be an asset sale with Zo Rooms founders and lead investor Tiger Global getting a combined stake of 7 per cent stake in Oyo.