Swatantra Dev Singh was appointed state BJP President last month.
Swatantra Dev Singh is also the minister of state (independent charge) for transport and protocol in the UP government.
Sengar was suspended from the party and will stay suspended. CBI inquiry in the case is underway, the state BJP chief Swatantra Dev Singh said.
Singh cannot simultaneously hold the posts of a minister and the state party chief, according to the BJP's "one person-one post" principle.
His appointment is seen as part of the BJP's effort to consolidate its support among the OBCs