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Dec. 22 (Bloomberg) -- Essar Energy Plc, an Indian oil refiner and power-plant operator, said Chairman Ravi Ruia will temporarily step aside as Indian authorities investigate a sale of licenses to run mobile-phone services.

“This decision follows allegations by India’s Central Bureau of Investigation,” Port Louis, Mauritius-based Essar Energy said yesterday in a statement. The CBI this month filed charges against Ravi Ruia and Essar Group Directors Anshuman Ruia and Vikash Saraf over the 2008 sale of phone licenses.

The authorities allege the executives concealed facts relating to the extent of Essar Group’s stake in Loop Telecom Ltd. and used Loop as a front company to secure licenses. Essar denies the charges, which aren’t related to Essar Energy or its subsidiaries, the company said.

A court headed by Special Judge O.P. Saini asked the Essar Group officials yesterday to appear on Jan. 27.

Former Telecommunications Minister Andimuthu Raja, a federal lawmaker, government officials and company executives are already on trial for conspiring to grant licenses to unqualified companies for personal benefit in 2008. The country’s auditor has said the first-come, first-served award of permits may have lowered government revenue by as much as $31 billion. All those on trial deny wrongdoing.

Essar Teleholdings Ltd., Loop Telecom and its unit Loop Mobile India Ltd., named as accused parties in the case, were also summoned by the judge.

Small Stake

Essar said Dec. 12 that it held only 2.15 percent in Loop at the time it applied for a license and didn't violate the law.

The scandal surrounding the wireless sale has weakened Prime Minister Manmohan Singh’s government, lowered investor confidence in the $1.7 trillion economy, stalled legislation and led to street protests.

With yesterday’s court decisions, 19 people and six companies stand accused of involvement. Twelve of the people have been freed on bail as their trials continue. Those released include three executives of billionaire Anil Ambani’s Reliance ADA Group and federal lawmaker Kanimozhi. Raja remains in custody in the capital’s Tihar prison.

To contact the reporters on this story: Eduard Gismatullin in London at; Pratap Patnaik in New Delhi at

To contact the editors responsible for this story: Will Kennedy at; Sam Nagarajan at

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