Mohit Goel, managing director of Ringing Bells Pvt Ltd, the company behind the Freedom 251 mobile phone, has resigned from the company.
Goel's wife Dharna, who was serving as the director of the company, has also stepped down.
Moreover, the company's office in Sector 62 at Noida has been shut for over two weeks, a report in The Economic Times said.
"Now Mr Anmol Goel, who is also one of the founder directors, is looking after the affairs of the company and will take it forward to achieve the goals it has set for itself," a company spokesperson said in a press statement.
The company claims to have delivered around 70,000 units of the mobile phone till now.
"We are still getting lot of interest in our product. Our target is the low income people who wish to own a smart phone," the spokesperson added.
The Noida-headquartered company had launched the Freedom 251 phone in February this year. Priced at Rs 251, the handset was cheaper than a 16GB micro SD card (which costs around Rs 300) or an iPhone cover (over Rs 400).
However, industry experts raised concerns on the feasibility of a 3G smartphone at such a price.
A month after the launch of Freedom 251, IT products firm Advantage Computers (Adcom) said that it sold mobile handsets to Ringing Bells for Rs 3,600 a unit and was unaware of its plans to resell the device at Rs 251. Ringing Bells had claimed it would recover the manufacturing cost of the phone, which is about Rs 2,500, through economies of scale, innovative marketing, reduction in duties and creating an e-commerce marketplace.
A series of complaints were made to the Telecom Ministry against the company. Apart from BJP MP Kirit Somaiya, the Indian Cellular Association (representative of mobile handset manufacturers) had also approached the Ministry to investigate the issue.
They said the price of the device with the said specifications could not be below Rs 3,500 even after a subsidised sale.
In March this year, the company was under investigation by Directorate of Enforcement for contraventions of provisions of Foreign Exchange Management Act (FEMA).