ED fines BBC World Service India Rs 3.44 crore for FEMA violations, penalises 3 directors too

New Delhi: The Enforcement Directorate (ED) Friday imposed a Rs 3.44 crore penalty on BBC World Service India, the India arm of the British Broadcasting Corporation (BBC), for violating the provisions of the Foreign Exchange Management Act (FEMA), ThePrint has learnt. 

Additionally, the global broadcasting giant has been slapped with a fine of Rs 5,000 per day from 15 October 2021 till the date of compliance with the norms of the Foreign Direct Investment (FDI).

The development came nearly two years after the ED—empowered to investigate FEMA offences—lodged a case against the company in April 2023. The ED’s FEMA case came after a “survey” of the BBC’s offices in New Delhi and Mumbai by teams of the Income Tax Department in February 2023.

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After the “survey”, the I-T Department said it “gathered several evidences, pertaining to the operation of the organisation—which indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group”.

Sources in the ED said that its investigation revealed violations of the maximum cap of 26 percent as mandated by the Department for Promotion of Industry and Internal Trade for digital media in September 2019 when the Union government introduced a new sub-category of ‘Digital Media‘ under the ‘Broadcasting Content Services’ category.

“BBC WS (World Service) India, which is a 100% FDI company engaged in uploading/ streaming news and current affairs through digital media, did not reduce their FDI to 26%, and kept it at 100% in gross violation of regulations issued by Government of India,” an ED official told ThePrint.

In addition to penalising the company, the agency has fined its directors—Giles Antony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons—roughly Rs 1.14 crore each for their alleged roles in managing company affairs when it allegedly violated the FDI norms. 

The latest development came nearly 18 months after ED’s show-cause notices to BBC India, its three directors, and its finance head in August 2023, citing contravention of the FDI norms established by the Centre. 

ThePrint has reached the BBC press office by email for its comments, and the report will be updated if and when a response is received.

In the wake of the I-T department “survey” and the ED’s FEMA probe, the British public service broadcaster restructured its functioning in India, establishing an indigenous company named Collective Newsroom. It creates programmes and content for the BBC as its client but is available to make content for other news providers in India and around the globe.

“The BBC will retain its news gathering team in India for its English language digital, television and radio outlets, headquartered in London. A new, independent, Indian-owned company called the Collective Newsroom will now produce content for the BBC’s six other Indian language services. The move comes a year after BBC India’s offices were searched by authorities,” announced the BBC earlier in April last year.

(Edited by Madhurita Goswami)

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