ED levies penalty of ₹3.44 crore on BBC India; ₹1.14 crore each on its 3 directors for FEMA violation | Latest News India

The Enforcement Directorate (ED) has levied a penalty on British Broadcasting Corporation (BBC) India and its directors alleging that the company violated India’s foreign funding law by not reducing its foreign funding despite the cap of 26% on digital media organisations, people familiar with the development said on Friday.

BBC Headquarters in London.(AP file photo)

The company, which was earlier surveyed by the Income Tax department in February 2023, has been fined a total of over ₹3.44 crore, along with a fine of ₹5,000 for every day after October 15, 2021, till the date of compliance.

“We have issued an adjudication order on Friday, levying a penalty of ₹3,44,48,850 on BBC WS India, along with a fine of ₹5000 for every day after 15.10.2021 till the date of compliance, for violation of provisions of FEMA (foreign exchange management act), 1999,” said an officer, who asked not to be named.

This officer added that “additionally, directors – Giles Antony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons have each been fined ₹1,14,82,950 for their roles in overseeing company operations during the period of contravention”.

The ED had launched a FEMA probe against BBC India in April 2023, based on the findings of the Income Tax department that carried out a three-day survey at the company’s offices in Delhi and other cities in February same year.

A second officer cited above said the adjudication proceedings under FEMA were initiated “after a show cause notice was issued on August 4, 2023, to BBC WS India, its three directors, and the finance head”.

Sharing details of how BBC violated the law, this officer said – “On September 18, 2019, DPIIT (department for promotion of industry and internal trade) issued a press note 4, stipulating a 26% FDI cap for digital media under the government approval route. However, BBC WS 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”.

The Income Tax department’s survey on BBC had revealed that income or the profits shown by BBC’s various entities was not commensurate with the scale of operations in India and evidence had emerged which indicates “the company has not paid taxes on certain remittances”, the Central Board of Direct Taxes (CBDT), parent body of IT department, had said in a statement in February 2023.

A BBC spokesperson had said in February 2023 that the company will continue to cooperate with the authorities and hope matters are resolved as soon as possible.

“The BBC is a trusted, independent media organisation and we stand by our colleagues and journalists who will continue to report without fear or favour,” BBC said in February 2023.

FEMA was enacted in 1999 after repealing the Foreign Exchange Regulation Act (FERA) of 1973. It is a civil law enacted to consolidate and amend the laws relating to facilitate external trade and payments and to promote the orderly development and maintenance of foreign exchange market in India. ED has been given the responsibility to conduct investigation into suspected contraventions of foreign exchange laws and regulations, to adjudicate and impose penalties on those adjudged to have contravened the law.

BBC responds

A BBC spokesperson said: “The BBC is committed to operating within the rules of all countries we are based in, including India. At this stage, neither BBC World Service India nor its directors have received any Adjudication Order from the Enforcement Directorate.”

“We will carefully review any order when it is received and consider next steps as appropriate,” the spokesperson added.

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