Simon Murray pointed out the base image used for OpenLDAP init container is busybox. ( https://github.com/osixia/docker-light-baseimage/blob/master/image/Dockerfile#L1)
As advised above, I tried running it in isolation outside operator env. with Istio.
The command used to run the container is "./tool/run" , This was changed to sleep for few minutes so that the start command can be run manually on the container to check for status of LDAP server.
A pod was created which brought up both Istio and modified LDAP container. The command was then run manually inside the LDAP container and the server started without any issue.
Apart from this step the image tags used in the test framework was updated to latest for openLDAP and openLDAPInit image but that didn't make the test pass as well.
Just to paraphrase , this test has been failing with Istio where we don't support TLS. However , LDAP seems to utilise TLS while creating server and checking for status.
Another modification tested was creating the LDAP server without TLS but the Couchbase pod failed to connect to LDAP server with error: Failed to use StartTLS extension