ED imposes ₹3.44 crore fine on BBC WS India for FEMA violations, penalises 3 directors

News Desk

21 February 2025, 09:24 PM IST

The Enforcement Directorate (ED) has imposed a penalty of ₹3.44 crore on BBC World Service India (BBC WS India) for violating Foreign Direct Investment (FDI) regulations, alongside individual fines on three of its directors.

A pedestrian walks past a BBC logo at Broadcasting House in central London | Reuters/Olivia Harris

New Delhi: The Enforcement Directorate (ED) has fined BBC World Service India ₹3.44 crore for alleged violations of Foreign Direct Investment (FDI) regulations under the Foreign Exchange Management Act (FEMA), 1999. Three of its directors—Giles Antony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons—have also been fined ₹1.14 crore each for overseeing operations during the period of contravention.

The penalties come as part of adjudication proceedings initiated following a show-cause notice issued on August 4, 2023. The ED launched a probe months after the Income Tax (I-T) department conducted a survey operation at the BBC’s India offices in February 2023.

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Nature of the alleged FEMA violation

• BBC WS India operates as a 100% FDI entity and was engaged in uploading/streaming news and current affairs through digital media.
• However, as per Press Note 4 (2019) issued by the Department for Promotion of Industry and Internal Trade (DPIIT), digital media platforms in India must limit FDI to 26% under the government approval route.
• BBC WS India failed to reduce its FDI to 26%, keeping it at 100%, which the ED termed a “gross violation” of Indian FDI regulations.
• In addition to the ₹3.44 crore penalty, the company faces a daily fine of ₹5,000 from October 15, 2021, until the date of compliance.

Background of regulatory actions against BBC

The Central Board of Direct Taxes (CBDT), which oversees the Income Tax Department, had earlier accused BBC entities of underreporting income and profits in India. Following the 2023 tax survey, the CBDT alleged that certain remittances to foreign BBC entities were not properly taxed.

The BBC, after the I-T department’s action, had stated that it would cooperate with authorities and hoped for a swift resolution of the matter.

The ED’s penalty marks a significant regulatory action against a foreign-owned digital media company operating in India, raising concerns over FDI compliance in the sector. The ruling could potentially impact other international media companies and set a precedent for stricter enforcement of foreign investment norms in digital media. The BBC has yet to issue an official response regarding the penalty or the ongoing legal proceedings.

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