OYO’s Bonus Share Ballot Sparks Outrage: Expert Calls It “A Masterclass in Deception”

In what’s being described as one of the most “brazen and unethical” corporate maneuvers in recent times, hospitality major OYO has come under sharp criticism over its recent postal ballot for issuing Bonus CCPS (Compulsorily Convertible Preference Shares). The move, according to a well-known LinkedIn commentator and startup ecosystem expert, Jayant Mundhra, is nothing short of a “masterclass in deception wrapped in legal jargon” — designed, he alleges, to enrich the company’s founder Ritesh Agarwal and his close associates, while leaving retail investors shortchanged.

The expert minced no words, calling the OYO founder “a shark for sure,” but also a “big thief and scamster” — underscoring his frustration with what he views as a deeply flawed system that allows such corporate maneuvers to pass unchecked.

Oyo: A Postal Ballot That Raises Questions

The controversy revolves around a recent postal ballot that offered shareholders two options — both framed, as the expert alleges, in a way that heavily disadvantages small and retail investors.

According to his breakdown, OYO’s communication to shareholders included an over 50-page document with a short 3-day window to respond. Those who missed the email or failed to act within the tight timeline were automatically assigned the default option: receiving just one bonus share for every 6,000 shares they own.

The catch? There was a second option — far more lucrative, but almost hidden behind complex procedures.

To avail this, shareholders were required to find the right annexure, fill out detailed paperwork, attach self-attested documents like PAN and CML, and send it all back before the 3-day deadline. Successfully completing this bureaucratic obstacle course would reward them with a stunning 1,109 bonus shares for every 6,000 they held.

As the expert puts it — “It’s a magic trick where the audience is forced to pick the wrong card.”

The Default Trap

The design, he alleges, was deliberate — “99% of retail investors will fail this test.”

Those who fail to respond in time end up with a token bonus. Meanwhile, the insiders — including the promoter group and key investors such as SoftBank — are expected to complete the required paperwork with ease and claim the far higher rewards.

The end result, the expert claims, is a massive transfer of wealth from retail shareholders to the promoters’ group.

Under this structure:

• Ritesh Agarwal & SoftBank receive 1,109 bonus shares for every 6,000 they hold.

• Retail investors, by default, get just 1 bonus share for the same amount.

This, he argues, effectively hands Ritesh an 18.5% equity bump — for free, diluting small shareholders who once backed him.

To put it in perspective, an investor holding 300,000 shares could end up with a mere ₹1,300 in value from the bonus issuance, while the promoter’s corresponding shareholding would yield ₹14.4 lakh.

A Disturbing Precedent

The expert warns that this move sets a dangerous precedent in India’s corporate and startup ecosystem — one that could erode investor trust in listed and soon-to-be-listed startups.

“The so-called shark is teaching a generation of founders that they don’t need to build value. They can just design complex corporate traps to steal it from minority shareholders,” he writes, lamenting what he describes as the death of good governance.

With this, he also questions the role of regulators like SEBI and the Government, whose silence, he says, is “deafening.”

“Why Bother With Good Governance?”

In his post, the expert takes a dig at OYO’s recent public image overhaul — the company has, over the last two years, invested heavily in rebuilding its reputation, repositioning itself as a responsible, governance-driven firm.

But this move, he argues, undoes much of that work.

“Shame on you, despite all that you’ve built, including the PR efforts you’ve been building over the last two years,” he writes, calling the episode an “absolute disgrace.”

While OYO has not officially responded to these allegations at the time of writing, the expert’s post has ignited discussions across investor circles and startup networks about corporate governance, transparency, and shareholder rights in India’s rapidly maturing startup ecosystem.

If the allegations are accurate, this could mark one of the most controversial examples of founder-driven control consolidation in recent memory — and, as the expert warns, could set a precedent that others may be tempted to follow unless regulators intervene.

Disclaimer: This article is based on a LinkedIn post written by Jayant Mundhra, Chief Builder of News Biz+ and a startup ecosystem expert. The views, opinions, and allegations expressed herein belong solely to the author of the original post and do not necessarily reflect those of TICE or its editorial team.