ED fines BBC India ₹3.44 cr for FEMA violation

New Delhi: The Enforcement Directorate has levied a penalty of more than ₹3.44 crore on BBC World Service India for alleged contravention of foreign direct investment (FDI) regulations, agency officials said on Friday.

The agency also fined three of its directors with more than ₹1.14 crore each as it issued an order against the British broadcaster following adjudication under the Foreign Exchange Management Act (FEMA).

The adjudication proceedings were initiated after a show-cause notice was issued on August 4, 2023, to BBC WS India, its three directors, and the finance head for various "contraventions" under the said law.

The ED launched a FEMA probe against the BBC a few months after the income-tax department conducted a survey operation at the news organisation's office in February 2023.

BBC WS India, which is a 100 per cent FDI company, was engaged in uploading and streaming news and current affairs through digital media but 'did not' reduce their FDI to 26 per cent, and kept it at 100 per cent in 'gross violation' of the regulations issued by the government of India, PTI reported. 

The Department for Promotion of Industry and Internal Trade (DPIIT) stipulates a 26 per cent FDI cap for digital media under the government approval route.

The total penalty levied on BBC WS India stands at ₹3,44,48,850 along with a fine of ₹5,000 for every day after October 15, 2021, till the date of compliance for violation of the provisions of FEMA, 1999. Three BBC 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 Central Board of Direct Taxes (CBDT), the administrative body for the IT department, had said in a statement after the 2023 survey that the income and profits shown by various BBC group entities were "not commensurate" with the scale of their operations in India, and that tax has not been paid on certain remittances by its foreign entities.

The BBC, after the IT action, had said they would "continue to cooperate with the authorities and hope matters are resolved as soon as possible".