Estafa case filed against hotel chain Maxmuller’s president Elizabeth Tio for govt contract related fraud

Manila, Philippines - January 10, 2024 - Global travel-tech company OYO has filed an Estafa against the President of Maxmuller Inc., a Manila based hospitality chain, for a fraud related to the government’s ‘Oplan Kalinga’ program. OYO had contracted stays in Maxmuller’s hotels as a part of the program. Maxmuller Group directly took payments from the ministry bypassing OYO.

The matter came to light when OYO raised claims for revenue sharing related to the government's 'Oplan Kalinga' program, for which Elizabeth had purportedly inked the agreement with OYO, asserting her status as the authorized representative of Maxmuller Inc., with full transactional authority.

However, Maxmuller group said that Elizabeth was not authorized by the Board of Directors to act for and on behalf of the company.

According to the case related documents, Elizabeth Tio had signed a Marketing and Operational Consultancy Agreement (MOCA) with OYO on behalf of Maxmuller group for the marketing and promotion of two of its hotels – MC Hotel and Fox Hotel in Quezon city in 2020. This was facilitated by John/Jane Doe, posing as a colleague of Elizabeth.

OYO pooled its funds, workforce and rendered its services in accordance with the terms and conditions of the MOCAs, including the act of listing MC Hotel and Fox Hotel in its app and website.

The partnership between OYO and Maxmuller expanded after OYO joined the government's 'Oplan Kalinga' program in August 2020, offering hotel rooms for Covid-19 patients. As part of the program, MC Hotel and Fox Hotel were used for isolation and quarantine purposes. OYO extended its services to the government and Elizabeth Tio, who purportedly represented Maxmuller, Inc. by adding a clause in the existing agreement, entitling OYO to a 5% share of the total revenue generated from this program.

OYO invested a total amount of Twenty-Three Million Three Hundred Seventy-Two Thousand One Hundred Fifty-Four Pesos and Forty-Nine cents (PhP 23,372,154.49) to faithfully comply with all its undertakings under the Addendums executed with Maxmiuller, Inc.

Maxmuller group recorded a substantial increase in revenue as a result of this partnership. The Office of the Civil Defense paid Maxmuller, Inc. the total net amount of PhP 7,641,562.50 for the hotel bookings facilitated through OYO. Subsequent payments thereafter followed in February 2022 from the Office of the Civil Defense. OYO was entitled to get 18,757,200 pesos and 1,705,200 pesos for the bookings done in Fox hotels and MC Hotel respectively.

OYO claims that Elizabeth Tio not only acknowledged the increase in revenues, but also the 5% share of OYO in the generated revenues.

However, Maxmuller, Inc. refused to remit the service fees and commissions claimed by OYO. It denied the validity of the MOCAs, its addendums and other related agreements, claiming that Elizabeth Tio was not authorized by the Board of Directors to act for and on behalf of the company.

A company spokesperson said that OYO remains vigilant in safeguarding its interests and ensuring accountability for any fraudulent activities that may undermine its reputation or business operations. OYO is cooperating fully with law enforcement authorities in their investigation of this matter and is committed to pursuing all available legal avenues to address the alleged fraudulent actions.