Ravi Ruia is being investigated for allegedly failing to properly disclose Essar’s full interest in Loop Telecom when it bid for a 2G license. In effect, the Indian Central Bureau of Investigation claims that Essar indirectly tried to bid for two licenses, which is forbidden.
Essar denies the claims, none of which involve allegations of corruption or bribery.
The development comes at an awkward time for City advisers hoping to bring foreign-owned companies to the London market, with growing concerns over corporate governance.
Ravi Ruia will be replaced by Prashant Ruia, currently vice-chairman of the firm and CEO of Essar Group, the listed oil firm’s parent company.
Essar Energy has yet to appoint a fifth non-executive since floating in 2010, despite saying it has a shortlist for the job.