Benin referee Bonaventure Koffi Codjia has been suspended indefinitely by the Confederation of African Football.
The move comes after he took no action against Algeria's Fawzi Chaouchi, who appeared to head-butt him in the semi-final of the Africa Cup of Nations.
The keeper was only given a yellow card for his confrontation with the referee.
Codjia, who is on the shortlist for the World Cup, did not put the incident in his match report on the game that Algeria lost 4-0.
Chaouchi was enraged by the way in which Egypt's Hosni Abd Rabou ran up to the ball, stopped and feigned his spot kick before stroking it easily into the net.
Codjia awarded the goal and Chaouchi chased after the referee, grabbing him from behind and turning him around and appeared to butt him.
He was quickly dragged away by team-mates.
A minute earlier the referee sent-off Algeria defender Rafik Halliche for a second caution for a tackle that led to Egypt being awarded the penalty.
Chaouchi was later sent off when an attempted kick at an opponent earned a second caution.
Algeria wing back Nadir Belhadj was also given a straight red card for a two-footed lunge with 20 minutes left as his side lost 4-0.
Caf said disciplinary proceedings against Belhadj and Chaouchi would be held next month.
Both face bans which could see them ruled out of the World Cup in South Africa.
Source: BBC
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