Indian conglomerate Essar has been accused of exploiting UK listing rules to short-change minority investors in its London subsidiary.
The Ruia brothers owned Essar Global had made a takeover bid to buy the remaining stake in London-listed Essar Energy on the cheap.
Philip Aiken, chairman of Essar Energy's independent committee of directors, said: "The UK listing rules are such that there's not a lot of things you can do."
Aiken's five-man committee was created to protect minority investors in the business from Essar Global.
Under existing London City rules, Essar Global can de-list the company once a vote, expected in approximately two monthsí time, is held.
Late on Friday night, Essar Global made a 70 pence-a-share offer for Essar Energy, in which it controls a 77 per cent stake.
Shares in Essar Energy have slumped since its April 2010 float which saw it raise 1.2 billion pounds by the sale of a 23.2 per cent stake at 420 pence a share.
"Clearly, the timing of the bid was designed to avoid the new rules. This is not good for minority investors," Aiken told 'The Sunday Times'.
"Youíve got to think very carefully about the reputation of London here. This really shows that the [UK] Listing Authority needs to implement new minority shareholder rights without delay," he added.
The flotation valued the business at 5.4 billion pounds, putting it inside the FTSE 100.
Minority shareholders, including Standard Life and Capital Group, are known to believe the 70 pence-a-share offered is not fair value.
The Association of British Insurers is reportedly monitoring the situation.
Essar Global has declined to comment on the matter.