Nasdaq-listed travel portal Yatra Online, Inc. is locked in an arbitration over a pending transaction with corporate travel services provider Air Travel Bureau Ltd (ATB) even as one of the sellers has filed a police complaint for alleged cheating and breach of trust.
Yatra said on Friday that the Economic Offences Wing of the Delhi Police registered a First Information Report on June 4 to investigate a criminal complaint previously filed by Sunil Narain, one of the key shareholders of ATB. The complaint alleged, among other things, cheating and criminal breach of trust in connection with Yatra India’s obligations under the share purchase agreement.
The online travel agency has denied the allegations and said that the original complaint was filed against Yatra’s Indian arm, certain employees and Yatra India’s external auditing firm.
In response, on May 30, Yatra India filed a petition with the High Court of Delhi seeking, among other things, interim relief against the complainant. Based on the petition, on May 31, the court issued an order granting certain interim relief to Yatra India. The court referred the matter to arbitration and also appointed an arbitrator.
The arbitration proceedings in the matter have commenced accordingly, Yatra added.
The issue relates to a two-year-old deal where Yatra Online Pvt Ltd, Yatra’s Indian arm, inked an agreement to acquire in ATB a majority stake (50.94%) in the first phase for Rs 51 crore with the remaining stake to be picked up at a later date.
This second leg of the deal is pending as the two sides have not yet agreed on the valuation for the final payment.
This was to be completed in the April-June quarter of 2018 with the total deal value estimated to be between $22.5 million and $27.5 million.
At that time, Yatra co-founder and CEO Dhruv Shringi had said the acquisition would strengthen its position in the large and growing corporate travel market in India.
Narain, who has filed the criminal complaint against Yatra, and the chairman and CEO of ATB had said at that time that the deal would help the company enhance its offerings for customers by leveraging Yatra’s technology platform and large hotel network.
At that time, ATB claimed to have generated gross bookings of Rs 1,500 crore through a client base of over 400 large and medium-sized businesses across India.
These developments come at a time when Yatra is being wooed for a deal by Ebix Inc. The US software firm had in March offered to acquire Yatra for $336 million (around Rs 2,350 crore) in a cash-and-stock deal aimed at boosting its portfolio of Indian travel ventures.
Ebix said that it intended to merge Yatra Online, which operates travel portal Yatra.com, with its Indian EbixCash subsidiary, which offers remittance services. Ebix had previously also acquired another Indian online travel agency Via.com.
Previously, in July 2016, Yatra had signed a reverse-merger agreement with US-based special purpose acquisition company Terrapin 3 Acquisition Corp, which was listed on the Nasdaq, paving the way for a back-door listing of the second Indian online travel services provider in the US.