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<ul><li>OYO founder <keyword id="1670338" type="PERSON" weightage="20" keywordseo="Ritesh-Agarwal">Ritesh Agarwal</keyword> was recently booked in a cheating case by a hotel owner in Bengaluru. </li><li>But there have been multiple such incidents across the country. </li><li>In the US too, OYO has been facing similar issues.</li></ul>OYO Hotels &amp; Homes, the Indian unicorn that has gone global seems to be going through a bad time. Founded by Ritesh Agarwal, OYO is on its way to hit its ambitious target of being the world’s largest hotel chain. It helps that they are already South Asia’s largest hotel chain by the number of rooms. OYO also recently launched OYO Partner Engagement Network (OPEN) through which it set up four regional Partner Advisory Councils which “provides a platform to discuss and determine micro and macro issues driving the future of hospitality in India”. Yet the past few months have been turbulent. From multiple FIRs to an uprising from hotel owners, OYO is now dealing with multiple cases. Cheating case against Agarwal and others Recently, a Bengaluru <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/cheating-case-against-oyo-founder-ritesh-agarwal-6-others/articleshow/71905131.cms">hotelier</a> filed a cheating case against Agarwal and six others claiming that the OYO hasn’t paid him his dues. According to the complaint, the hotelier has claimed that OYO was supposed to pay him ₹7 lakh a month for room bookings but failed to do so since May 2019. "Our lawyers are looking into the matter and will be taking strong legal action as these claims are incorrect and defamatory in nature. OYO Hotels &amp; Homes will initiate appropriate criminal proceedings against the Bengaluru owner who is sensationalising a civil dispute to attract attention. On studying a similar matter where an FIR was wrongfully filed in September, the honourable Karnataka High Court recently stayed the adverse actions via an injunction in Bengaluru. We, therefore, have strong reasons to repose our faith in the justice system," said a statement from OYO. OYO also claims to have an annual retention as high as 99.5% across the chain in India &amp; South Asia. Incidents at OYO Hotels Recently, a national level shooter was found dead in an OYO hotel reportedly due to electrocution. On the other hand, an employee in a Gurugram-based OYO hotel was also accused of <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/electrocution-case-oyo-says-it-is-cooperating-with-police-authorities/articleshow/71607725.cms">raping</a> a guest. In both cases, OYO has said that it is working with the authorities and helping with the investigation. Hotel owners’ rising rage Hotel partners have been raising their concerns about OYO for quite some time now, with some even calling it the <a href="https://www.firstpost.com/business/hotel-operators-who-partnered-with-oyo-call-it-biggest-online-fraud-demand-criminal-probe-against-softbank-backed-startup-7462021.html">‘biggest online fraud’.</a> Multiple protests have also been organised by hoteliers against OYO across the country. Most of the protests have been about clearance of dues. Another point <a href="https://www.businesstoday.in/current/corporate/as-softbank-oyo-booms-over-10000-hotels-cry-foul-and-check-out/story/383337.html">raised by hotel owners</a> has been that while OYO charges 20% franchise fee on room revenues, it ultimately takes more money through different sources that aren’t disclosed initially. Trouble in America too OYO, after having had a great run in China, also expanded to the US. It has even taken over a Hooters hotel in Las Vegas and rebranded it to be an OYO hotel. US-based media outlet <a href="https://skift.com/2019/10/24/budget-chain-oyo-can-be-a-nightmare-for-u-s-hotel-operators-despite-its-hype/">Skift</a> has reported that several hotel owners complained that OYO’s partner management system didn’t work properly along with non payment of dues. CCI investigation MakeMyTrip and Oyo’s commercial agreement is being investigated by the Competition Commission of India. The alleged dominance that they would enjoy is now under scanner. And prima facie, MakeMyTrip is identified as ‘dominant’ in the online travel market while OYO holds the same position in the hotels market. The joint effect of their partnership could alter the way the market operates. “OYO has been prima facie found to be a significant player in the ‘market for franchising services for budget hotels in India,” said the report. See Also: <a href="https://www.businessinsider.in/business/startups/news/why-makemytrip-and-oyo-are-in-trouble-with-the-cci/articleshow/71818051.cms">MakeMyTrip and Oyo are in trouble with the CCI, opening up a gray area for business partnerships in India</a>

Dues, death and an investigation — all that went wrong with OYO hotels in the last 6 months

<ul><li><keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword> and <keyword id="2808667" type="PERSON" weightage="20" keywordseo="OYO">Oyo</keyword> have both been in the eye of many public controversies, stirred by industry bodies.</li><li>While Zomato has been in the middle of a <keyword id="7998183" type="UNKNOWN" weightage="20" keywordseo="logout-movement">logout movement</keyword> from restaurants, Oyo has been dealing with legal complaints against its founder for breach of trust. </li><li>This has affected the public branding and image of the companies.</li></ul><keyword id="476451" type="PERSON" weightage="20" keywordseo="Deepinder-Goyal">Deepinder Goyal</keyword> and <keyword id="1670338" type="PERSON" weightage="20" keywordseo="Ritesh-Agarwal">Ritesh Agarwal</keyword> maybe poster boys of the Indian startup industry. But,the founders of Zomato and Oyo are dealing with complaints from industry bodies, associations and even backlash from their own employees. Startups which have started to solve existing problems, are now facing their own. The problems surrounding Zomato and Oyo Zomato was caught in the throes of a very public controversy thanks to its deep discounting programmes like Zomato Gold (where consumers can avail 1+1 on food and 2+2 on drinks) and infinity dining. The National Restaurant Association of India (NRAI) launched a ‘logout’ movement last month claiming that the business practices of aggregators are unethical. The movement saw hundreds of restaurants delisting from the app. But that’s not the end of it. Zomato’s delivery executives across Mumbai and Bengaluru are protesting for pay cuts. The company is also in the news for reportedly laying off employees at its Gurgaon headquarters. Oyo is in no better position. On one hand, it is battling legal complaints from a Bengaluru-based hotelier accusing Agarwal of cheating and breach of trust. A month ago, hoteliers too had begun boycotting Oyo, but the Delhi High Court had ruled the case in the company’s favour. To tackle these issues, Zomato reportedly held several meetings with the NRAI. It also backtracked by cutting off discounts from its Zomato Gold programme. It has also put its recently launched Infinity Dining programme on a ‘pause’ mode. Oyo, on the other hand, has refuted all claims against its founder and has been unfazed through its expansion journey globally. The branding has taken a hit Startups and their success is important not just because of their disruptive nature, but their popularity has made them almost invincible with a ‘can-do’ attitude. These issues have come to prove that it is not the case. And, it has started to show. This is evident in its survey rankings. YouGov measures a brand by the buzz it generates in two weeks. Zomato’s Buzz fell by 6.8 points, from 42.7 in the beginning of July, to 35.9 in August end. “Zomato’s Brand Index score which is an average of quality, value, impression, reputation, satisfaction and recommend scores, has also fallen from 38.5 on 31st July to 34.9 on 31st August 2019, the time period marked by the two controversies,” said YouGov. This is a big blow for Zomato which is known for its witty, quirky marketing campaigns on and off-line that has caught the fancy of millennials. The company however said that its own internal tracking system shows no significant dip in perception in the last 3 months. "On the contrary, metrics such as trust, brand love, innovation, etc. have shown consistent upswing. These metrics are tracked diligently on a daily/weekly/monthly basis and none of the external noise has impacted our core consumer perception in a negative manner. In fact, we have noted a spike in the user engagement with an increase in average time spent on the app, session counts, weekly downloads, etc. These results from continuous monitoring have reaffirmed our current approach towards consumer engagement and product innovation,” said a Zomato spokesperson. Brand expert Harish Bijoor believes that Zomato and Oyo both need to be worried. “We live in the era of nano-second social media hurt. Every social media comment that is hurtful to the brand is a scar. Too many scars, and the brand can get into a negative tizzy. Brands need to be careful, and more importantly quick in their reactions to issues. Both Zomato and Oyo have been through this. As of now, the brand image has not been hurt. it has been jolted, but not damaged,” said Bijoor.

It's a stormy time for two of India's biggest startup brands

<ul><li>The CAIT is seeking probe and has alleged that <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> and <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> are avoiding a tax liability. </li><li>Meanwhile, <keyword id="2808667" type="PERSON" weightage="20" keywordseo="OYO">OYO</keyword>’s troubles continue with hotel owners alleging unethical practices followed by the company. </li><li>Following the <keyword id="92417" type="ORGANIZATION" weightage="20" keywordseo="NRAI">NRAI</keyword>’s path, the Indian Hotel and Restaurant Association (AHAR), which has 8,000 members nationally is also claiming to have logged out of <keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword>. </li></ul>India’s biggest startups have been solving its systemic problems to build businesses. But the system has now started revolting and it could be another trouble that they have to solve. Startups like Oyo, Zomato, Amazon, Flipkart which have all disrupted traditional setup are now facing challenges that come with overtaking a market. Here’s a look at how trouble is brewing for the companies. Amazon and Flipkart Amazon and Flipkart are united in a rare case – where they both are facing a protest from the Confederation Of All India <keyword id="6371444" type="UNKNOWN" weightage="20" keywordseo="traders">Traders</keyword> (CAIT). While trader protests have been a part of the e-commerce journey so far in India, it has intensified with the CAIT now seeking a <a href="https://www.livemint.com/companies/news/cait-seeks-probe-into-alleged-avoidance-of-tax-liability-by-amazon-flipkart-11574620469832.html">probe </a>against Amazon and Flipkart. The CAIT alleged that Amazon and Flipkart are evading tax. It said that the companies are selling products for much lower than their fair price value, thus avoiding a larger GST cost. “Since FDI is governed by the FEMA and the Reserve Bank of India, it is demanded that an another enquiry may also be initiated on pattern of receivable funding and its disbursement," CAIT <a href="https://www.livemint.com/companies/news/cait-seeks-probe-into-alleged-avoidance-of-tax-liability-by-amazon-flipkart-11574620469832.html">said.</a> Earlier, the CAIT also organised a nationwide protest against the deep discounting of products on Amazon and Flipkart. OYO OYO brought Indian budget hotels online and shot to fame thanks to its many customers. But hotel owners who they work with are alleging that OYO’s practices are unethical. Recently, a Bengaluru hotelier filed a cheating case against Agarwal and six others claiming that the OYO hasn’t paid him his dues. According to the complaint, OYO was supposed to pay ₹7 lakh a month for room bookings but failed to do so since May 2019. OYO responded stating that it would fight back with a complaint against the hotelier for "using improper legal means to sensationalise a civil dispute and get attention". “This matter is currently sub-judice, and we are not at the liberty of commenting on specifics. Having said that, we strongly refute the claims made in the complaint that has been wrongfully filed against our founder and six other office bearers, based on false allegations and exaggeration on a regular commercial dispute,” the company said in a statement. The case of the Bengaluru hotelier is not isolated. Similar reports have surfaced from across the country against <a href="https://www.thenewsminute.com/article/why-many-hotel-owners-across-india-are-agitated-oyos-business-model-106154">OYO</a>. Zomato Indian foodtech unicorn has had a rough few months thanks to one of its bestselling features – Zomato Gold. The National Restaurant Association of India protested against the feature saying that Zomato advertised the ‘elite’ feature which turned out to be a mass product. This resulted in thousands of restaurateurs logging out of Zomato. The foodtech aggregator had shut down the logout movement by not offering discounts for its gold membership. However, it also extended the service for home delivery, where users could avail the 1+1 and 2+2 offers. Now, following the NRAI’s path, the Indian Hotel and Restaurant Association <a href="https://economictimes.indiatimes.com/industry/services/hotels-/-restaurants/8000-strong-hotels-body-to-shun-zomato-gold-delivery/articleshow/72215761.cms">(AHAR)</a>, which has 8,000 members nationally is also claiming to have logged out of Zomato because of Gold on delivery and other issues like unavailability of delivery executives.

Oyo, Zomato, Amazon, and Flipkart are chasing growth but the very foundation is shaking

<ul><li>Rating agency Moody downgraded its outlook from stable to negative.</li><li>OYO founder Ritesh Agarwal was recently booked in a cheating case by a hotel owner in Bengaluru.</li><li><keyword id="2404631" type="PERSON" weightage="20" keywordseo="Motu-Patlu">Motu Patlu</keyword>’s creators eye the big fat Chinese cartoon market with 5 new shows 
</li></ul>This week, rating agency Moody’s changed its outlook on India from stable to negative. Motu Patlu’s creator told Business Insider that they are going to launch five new shows in China. OYO founder Ritesh Agarwal was recently booked in a cheating case by a hotel owner in Bengaluru. The stalemate over <keyword id="13126" type="LOCATION" weightage="20" keywordseo="Maharashtra">Maharashtra</keyword> state government continues. Senior <keyword id="6358821" type="ORGANIZATION" weightage="20" keywordseo="shiv-sena">Shiv Sena</keyword> leader Sanjay Raut met NCP chief Sharad Pawar in Mumbai on Wednesday. <div type="Slideshow" msid="71972407" hostid="261" title="Here’s a rundown of what all happened this week" firstImageMsid="71972408" slideCount="4"></div>

Here’s a rundown of what all happened this week

<ul><li>Big Indian startups have been in the public eye for many controversies thanks to the concerns raised by various <keyword id="946463" type="PERSON" weightage="20" keywordseo="industry-bodies">industry bodies</keyword>. </li><li>From ban on sales to stopping discounts, industry bodies have picked a fight against startups. </li><li><keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword>, Oyo, Flipkart and Amazon have all been affected by the same. </li></ul>Indian startups have a growing problem at home – industry bodies from different sectors are now up in arms against discounts and deals. From Zomato and Oyo to Flipkart and even the global retail giant Amazon is caught in a fight. Here’s a look at all that’s gone down between industry bodies and startups in just the last month. Restaurants vs online aggregators All seemed to be going well between Indian restaurateurs and online aggregators until last month. The National Restaurant Association of India, which has over 500,000 outlets as members, woke up to the many deals presented by the likes of Zomato, <keyword id="6358977" type="UNKNOWN" weightage="20" keywordseo="swiggy">Swiggy</keyword>, EazyDiner, Dineout etc., and said that the excessive discounts offered by the delivery apps are throttling their businesses. Zomato bore the brunt of the restaurants’ ire – from the logout movement to social media uproar from hoteliers It had also faced protests from its delivery executives, who were not happy with the pay cuts from the aggregator. The foodtech unicorn paused on its Infinity Dining feature and curtailed the Zomato Gold program but the restaurants remain animus towards the firm. Despite many attempts to thaw in the frosty relationship there is no resolution yet for Zomato and Swiggy. Hotel associations against Oyo Oyo Hotels &amp; Homes in the past few years has grown at a rapid pace to have its signboard up in every big city, and many small towns-- adding up to 270,000 rooms across the country. But in its fast acquisition of buildings and hotels, some traditional hoteliers have raised concerns about ‘illegal practices’. Oyo is battling legal complaints from a Bengaluru-based hotelier accusing Ritesh Agarwal, the founder, of cheating and breach of trust. A month ago, hoteliers too began boycotting Oyo but the Delhi High Court ruled the case in favour of the $5 billion startup. The good ol’ e-commerce fight Indian e-commerce has long been in the eye of public dissent from industry bodies. The likes of Flipkart and Amazon were the first to be hit because of their deep discounting which allows them to acquire customers faster. With the festive season around the corner, Flipkart and Amazon both have massive sales coming up. Flipkart is in fact getting ready with its annual sale – The Big Billion Day Sale. However, now the Confederation of All India Traders is demanding a <a href="https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/ahead-of-diwali-sale-cait-says-ecomm-giants-flouting-rules/71167595">ban </a>on these sales. The CAIT is an industry body for over 7 crore traders. The body has alleged that the two e-commerce giants are violating the Foreign Direct Investment rules with their massive ad campaigns. It has also written to Union Minister Piyush Goyal regarding the same.

India’s biggest startups are faced with growing resistance from industry bodies

<ul><li><keyword id="6356684" type="UNKNOWN" weightage="20" keywordseo="patanjali">Patanjali</keyword> chairman Archarya Balkrishna’s estimated net worth was cut down by a third in 2020.</li><li>He now ranks 919th on the <keyword id="424923" type="PERSON" weightage="20" keywordseo="Hurun-rich-list">Hurun Rich List</keyword> after having slipped 489 places.</li><li>The dip in his wealth comes at a time when he is desperately trying to launch <keyword id="9448306" type="UNKNOWN" weightage="20" keywordseo="Coronil">Coronil</keyword>, a medicine he claims is a cure for COVID-19 — a claim, which many dispute. </li></ul>Archarya Balkrishna, the chairman and CEO of Patanjali as well as the right-hand man to yoga guru <keyword id="6355107" type="UNKNOWN" weightage="20" keywordseo="Baba-Ramdev">Baba Ramdev</keyword>, took a massive hit to his wealth during the pandemic. <div type="image" title="5746a6c1b0aa6d17dd0b8657c3e31a3c_edited" msid="81294979" hostid="261" caption="&amp;lt;p&amp;gt;Acharya Balkrishna doing yoga with Baba Ramdev on Yoga Day in 2018 with two lakh people to create a world record for the largest amount of people performing yoga in one place&amp;lt;/p&amp;gt;"></div> According to Hurun’s Rich List 2021, Balkrishna’s estimated net worth dipped by 32% — more than any other Indian billionaire on the list this year in percentage terms. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Balkrishna’s estimated net worth in 2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Balkrishna’s estimated net worth in 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$5.3 billion </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$3.6 billion </td></tr></tbody></table> <div type="Article" hostid="261" msid="81288884" title="Meet Jay Chaudhry, the man who studied under a tree in Himachal to become one of the world’s top billionaires today" mstype="2" mssubtype="0"></div> Balkrishna has often stated that the underlying vision for Patanjali is to replace all foreign imports with ‘swadeshi’ (locally made) products. It is one of the reasons why the massive FMCG company has its fingers dipped in nearly every business from food to clothing to power to private security. It even has projects going in the <a href="https://theprint.in/tech/how-ramdevs-patanjali-ayurved-made-a-secret-tech-entry-with-its-own-it-start-up/369203/">cloud services and IT solutions space.</a> <div type="image" title="balkrishna2_edited" msid="81295070" hostid="261" caption="&amp;lt;p&amp;gt;Acharya Balkrishna announcing the availability of Patanjali products across major online portals on 16 January 2018&amp;lt;/p&amp;gt;"></div> But luck was not on Patanjali’s side when the company decided to launch Coronil, its self-proclaimed cure for COVID-19. The claim has been disputed by many in the medical community including the World Health Organisation (WHO) and the Indian Medical Association (IMA). The state of Maharashtra has banned the sale of Coronil until it receives certification from the Ayush Ministry, which looks after all things ayurved, naturopathy, homeopathy, unani, siddha and yoga. For Balkrishna, this is not the first time that he has been caught on the wrong side of things. Balkrishna’s multi-billion dollar empire is not without its controversies Back in 2011, the Central Bureau of Investigation (CBI) filed a case of forgery and cheating against Balkrishna. <a href="https://www.businessinsider.in/small-business/people/fake-degrees-and-passports-here-is-the-real-story-of-acharya-balakrishna-ramdevs-close-aide-and-patanjali-ceo/slidelist/54365692.cms">According to the CBI</a>, the degree that Balkrishna got from the Sampurnanand Sanskrit Vishwavidyalaya in Varanasi was fake. And, it was on the basis of this fake degree that Balkrishna had procured his passport. The administration of the university also <a href="https://www.business-standard.com/article/beyond-business/the-rise-and-fall-of-balkrishna-111073000065_1.html">claimed</a> that they had no record of ever giving Balkrishna a degree. However, the case was closed two years later due to lack of evidence. In 2012, the Enforcement Directorate (ED) also filed a case against Balkrishna over money laundering charges. These were dropped after the National Democratic Alliance (NDA) came into power in 2014. <div type="image" title="6738550d3499f71f5dbe014dfcd955bd_edited" msid="81295019" hostid="261" caption="&amp;lt;p&amp;gt;Acharya Balkrishna (L), Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagwat (C), and Baba Ramdev (R) in conversation during an RSS program in Haridwar in 2014&amp;lt;/p&amp;gt;"></div> Balkrishna holds 94% stake in Patanjali but he does not take home a salary, according to the <a href="https://economictimes.indiatimes.com/news/company/corporate-trends/how-acharya-balkrishna-built-a-multi-crore-company/built-for-success/slideshow/60853399.cms">Economic Times</a>. He claims to work 15 hours a day, regardless of whether it is a Sunday or any other holiday. According to financial data accessed by business intelligence firm <a href="https://www.business-standard.com/article/companies/patanjali-ayurved-s-revenue-and-profit-rise-but-still-far-from-glory-days-120111301248_1.html">Tofler</a>, Patanjali reported a net profit of ₹423 crore for FY20. But, even with that positive growth, Patanjali is far from its glory days of yore where its revenue used to double year-on-year. The company has been facing issues since the goods and services tax (GST) was introduced in 2017, disrupting its operations. Patanjali also <a href="https://www.livemint.com/companies/news/patanjali-ayurved-completes-acquisition-of-bankrupt-ruchi-soya-for-rs-4-350-crore-11576684912487.html">acquired Ruchi Soya in 2019</a>, which placed further burden on its financials. SEE ALSO: <a href="https://www.businessinsider.in/thelife/personalities/news/ritesh-agarwal-kishore-biyani-and-acharya-balkrishna-net-worth-went-down-in-year-2020-as-per-hurun-list/slidelist/81293374.cms">OYO’s Ritesh Agarwal and Future Group’s Kishore Biyani did not make the cut this year to be among India’s richest billionaires</a> <a href="https://www.businessinsider.in/thelife/personalities/news/gautam-adani-naveen-jindal-anand-mahindra-and-kumar-mangalam-birla-increased-their-net-worth-in-2020/slidelist/81290572.cms">Gautam Adani, Naveen Jindal, Anand Mahindra and Kumar Mangalam Birla increased their net worth despite COVID-19 wreaking havoc</a> <a href="https://www.businessinsider.in/tech/news/top-10-tech-billionaires-in-india-as-per-hurun-rich-list-2021/slidelist/81287575.cms">Top 10 tech billionaires in India — Shiv Nadar saw his net worth increase by $10 billion</a>

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Dues, death and an investigation — all that went wrong with OYO hotels in the last 6 months

Sanchita Dash

It's a stormy time for two of India's biggest startup brands

Sanchita Dash

Oyo, Zomato, Amazon, and Flipkart are chasing growth but the very foundation is shaking

Sanchita Dash

Here’s a rundown of what all happened this week

BI India Bureau

India’s biggest startups are faced with growing resistance from industry bodies

Sanchita Dash

Patanjali’s Acharya Balkrishna is the biggest loser on Hurun’s Rich List of Indian billionaires

Prabhjote Gill

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