London: Essar Energy Chairman Ravi Ruia on Wednesday announced his decision to step down from the post amid CBI claiming that Essar group suppressed facts related to its equity holding in Loop Telecom, an allegation denied by the conglomerate.
Essar Group is surprised and disappointed by the stand taken by the CBI, Essar Energy said in a statement.
Meanwhile, Ravi Ruia has voluntarily decided to temporarily step aside as Chairman but would continue as a director of Essar Energy. Prashant Ruia, presently the Vice Chairman, would take over as interim Chairman.
"This decision follows allegations by India's Central Bureau of Investigation (CBI) that Ruia, certain other executives of the Essar Group and Essar Teleholdings Ltd - an Indian company belonging to the Essar Group, had suppressed facts relating to the extent of equity holding of Essar Group in Loop Telecom Ltd (Loop)," the statement said.
Essar Energy noted that "there are no charges of bribery or corruption or collusion with public servants (as compared to the other prosecutions being pursued in the 2G spectrum scam)".
Ravi Ruia said he believed that as a good corporate governance measure, he should step aside at this time. "Essar Group has always been open, transparent and law abiding, and I am confident that these charges will be dismissed by the courts in India. I expect that I would resume the office of Chairman at an appropriate time," he noted.
According to Essar Energy, Ravi Ruia and Essar Group deny all charges and intend to take legal recourse to defend their position.
CBI's allegations mainly relate to a certification given by Loop Telecom at the time of grant of Universal Access Services licences (mobile telecom licences) that Loop was in compliance with Clause 8 of the guidelines under which such licences were issued.
This particular clause prohibits any shareholder company - directly or through its associates from holding 10 per cent or more equity shareholding in more than one mobile licensee company.
"Essar Group is surprised and disappointed by the stand taken by the CBI especially because the Indian Ministries of Law & Justice and Corporate Affairs have already reviewed the facts and confirmed that the direct and indirect shareholding of the Essar Group in Loop was below 10 per cent...," the statement said.
Therefore there was no such violation and that no prima facie case of any offence can be made out, it added.
As per the statement, the charges do not relate to Essar Energy plc, or any of its businesses and subsidiaries, and are not expected to have any impact on Essar Energy's business operations.
Essar Global, the principal holding company for Essar Group's business activities both in India and overseas, holds 76.72 per cent stake in Essar Energy.
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