Income tax authorities had carried out a surprise search at one of the four offices of Oyo Hotels and Homes in Gurugram on Friday.
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“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.
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It was however not clear what prompted the search and Oyo also chose not to elaborate on it.
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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.
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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.
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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.
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In November, internal projections showed Oyo’s India business is likely to make losses until 2021.
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