Enforcement Directorate Imposes ₹3.5 Crore Fine on BBC Over FEMA Breach

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

The federal probe agency also imposed a fine of over Rs 1.14 crore each on three of BBC World Service India's directors after an adjudication under the Foreign Exchange Management Act (FEMA).

The BBC had not responded to a query sent by PTI regarding the matter at the time.

ED's FEMA Probe Against BBC

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.

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.

Sources said that BBC WS India, a 100% FDI company, violated Indian government regulations by continuing to maintain 100% FDI while uploading and streaming news, instead of reducing it to 26%.

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The press note 4 issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on September 18, 2019, stipulates a 26 per cent FDI cap for digital media under the government approval route, they said.

ED Imposes Penalties on BBC WS India and Directors for FEMA Violations

The total penalty on BBC WS India amounts to Rs 3,44,48,850, with daily fines imposed for non-compliance, while three directors were fined Rs 1,14,82,950 each.

The Central Board of Direct Taxes (CBDT), the administrative body for the I-T 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.

Following the I-T action, the BBC stated that it would "continue cooperating with authorities and hopes the matter is resolved promptly."