ED imposes fine of over ₹3 crore on BBC India for forex violation

The Enforcement Directorate has imposed a fine of ₹3.44 crore on BBC World Service India for allegedly breaching the foreign direct investment FDI rules.

The agency officials on Feb 21 said that they have also levied a fine of ₹1.14 crore on three directors each while an order has been issued against the British broadcaster following adjudication under the Foreign Exchange Management Act (FEMA).

The total penalty imposed on BBC WS India amounts to ₹3,44,48,850, along with a daily fine of ₹5,000 from October 15, 2021, until compliance, for violating the provisions of FEMA, 1999.

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.

"At this stage, neither BBC World Service India nor its directors have received any adjudication order from the Enforcement Directorate," a BBC spokesperson said in a statement as quoted by the news agency PTI.

"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 adjudication proceedings began following a show-cause issued on August 4, 2023, to BBC WS India, its three directors, and the finance head for various "contraventions" under the said law.

According to sources, BBC WS India, a 100% FDI company, continued uploading and streaming news and current affairs via digital media but failed to reduce its FDI to 26%, maintaining it at 100% in gross violation of Indian government regulations.

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

The Press Note 4, issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on September 18, 2019, mandates a 26% FDI cap for digital media under the government approval route, sources said.

The Central Board of Direct Taxes (CBDT), 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 I-T action, had said it would "continue to cooperate with the authorities and hope the matters are resolved as soon as possible".