Photo: YouTube/@BBCWorldService
The Enforcement Directorate (ED) on Friday (February 21, 2025) issued an adjudication order levying a penalty of over ₹3.44 crore on BBC World Service (WS) India, along with a fine of ₹5,000 per day after October 15, 2021, till the date of compliance, for the alleged violation of the Foreign Exchange Management Act (FEMA) provisions, according to agency sources.
“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,” said a source.
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.
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The agency noted that on September 18, 2019, the Department for Promotion of Industry and Internal Trade (DPIIT) had issued a press note stipulating a 26% Foreign Direct Investment (FDI) cap for digital media under the government approval route.
However, the ED has alleged, BBC WS India — which is a 100% FDI company engaged in uploading/streaming news and current affairs through digital media — did not reduce its FDI to 26%, and kept it at 100% in “gross violation of regulations” issued by the Government of India.
The agency had launched an inquiry into the BBC India under the FEMA in April 2023 for suspected violations and asked some of its functionaries to submit certain documents for scrutiny.
Earlier in February 2023, the Income-Tax Department surveyed the Delhi and Mumbai offices of the BBC on suspicion of “deliberate non-compliance with the transfer pricing rules and vast diversion of profits”.
Listing the alleged irregularities, an agency source had then said that the BBC was “non-compliant under transfer pricing rules; persistent and deliberate violative of transfer pricing norms; and deliberately diverted significant amount of the profits and have not followed the arm’s length arrangement in the case of allocation of profit”.
In December 2023, the BBC announced that it was restructuring its operations in India to comply with the country’s foreign investment rules. “Four employees will leave the BBC to form a wholly Indian-owned company, Collective Newsroom, containing the BBC’s six Indian language services. The broadcaster’s English language newsgathering operation in India will remain with the BBC,” said a BBC report.
“It follows an investigation this year which saw the BBC’s India offices searched by tax authorities. Foreign funding for digital news companies based in India was capped at 26% under new regulatory requirements. The change effectively means any company publishing digital news content in the country must be majority-owned by Indian nationals,” it said.
Published – February 21, 2025 08:52 pm IST