Mugdha Das

ED imposes Rs 3.44 crore penalty on BBC India for FEMA breaches

Digital desk: Two years after filing a case against British Broadcasting Company (BBC) India under the Foreign Exchange Management Act (FEMA) for suspected foreign exchange violations, the Enforcement Directorate on Friday issued an adjudication decision imposing a Rs 3.44 crore penalty on the broadcaster. The agency also fined three BBC directors Rs 1.14 crore each.

The ED filed the case in February 2023 after Income Tax Department surveys at the BBC's New Delhi and Mumbai offices revealed alleged "non-compliance" with transfer pricing regulations and profit diversion.

According to PTI, despite Indian regulations mandating a cap of 26% 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, BBC WS India, classified as a 100 percent FDI company, continued operations with full foreign ownership.

The total penalty is Rs 3,44,48,850, with an extra fee of Rs 5,000 per day starting October 15, 2021, until compliance is fulfilled. The three directors, Giles Antony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons, have been fined Rs 1,14,82,950 each for their involvement in managing the company's operations during the alleged infraction.

The tax department's action occurred after the British broadcaster aired a program about the 2002 Gujarat riots titled "India: The Modi Question" on January 17, 2023. On January 20, the Centre ordered YouTube and Twitter to remove links to the video, claiming that they were "undermining the sovereignty and integrity of India".