ED slaps Rs 3.44 crore penalty on BBC India for FEMA violations; three directors fined Rs 1.14 crore each – India News

Two years after initiating a case under the Foreign Exchange Management Act (FEMA) against BBC India for alleged foreign exchange violations, the Enforcement Directorate (ED) on Friday imposed a penalty of Rs 3.44 crore on the broadcaster. The ED also fined three of its directors with a penalty of Rs 1.14 crore each.

In response, a BBC spokesperson told PTI that neither BBC World Service (WS) India nor its directors had received the adjudication order yet. “The BBC is committed to operating within the rules of all countries we are based in, including India. We will carefully review any order when it is received and consider next steps as appropriate,” the spokesperson said.

The ED’s action follows a show-cause notice issued on August 4, 2023, to BBC WS India, its three directors and its finance head, citing multiple contraventions of FEMA regulations. The investigation was launched months after the Income Tax Department conducted a survey at BBC’s Delhi office in February 2023.

According to PTI report quoting sources, BBC WS India, classified as a 100 percent FDI company, continued operations with full foreign ownership despite Indian regulations mandating a cap of 26 percent FDI for digital media entities under the government approval route, as per Press Note 4 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) in September 2019.

The total penalty amounts to Rs 3,44,48,850, along with an additional fine of Rs 5,000 per day from October 15, 2021, until compliance is met. The three directors — Giles Antony Hunt, Indu Shekhar Sinha and Paul Michael Gibbons — have been fined Rs 1,14,82,950 each for their roles in overseeing the company’s operations during the period of alleged violation.

The Central Board of Direct Taxes (CBDT) had earlier stated that the income and profits reported by various BBC entities were “not commensurate” with the scale of their operations in India, alleging that certain remittances had not been taxed properly.

Following the income tax action, the BBC had expressed its commitment to cooperate fully with Indian authorities, stating, “We hope the matters are resolved as soon as possible.”

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