New Delhi: The Enforcement Directorate (ED) on Monday said it has imposed a Rs 184-crore FEMA penalty against news portal NewsClick and its founder and editor-in-chief Prabir Purkayastha, who came under the scanner of the probe agencies on allegations of peddling “pro-China propaganda” through its stories.
PPK NEWSCLICK Studio Private Limited, the company that owns NewsClick, has been penalised for an amount of Rs 120 crore while Purkayastha has been imposed with the same order for Rs 64 crore under the Foreign Exchange Management Act (FEMA), the federal agency said in a statement. The order has been issued by the Adjudicating Authority of FEMA (a special director rank officer of the ED) after completing the adjudication process (end of investigation) against the two entities related to “violations” of foreign direct investment and foreign inward remittances.
“The Adjudicating Authority observed that the contraventions were substantial, deliberate, and systemic in nature, involving large-scale foreign exchange transactions and breach of statutory declarations furnished to regulatory authorities,” it said.
There was no immediate response from NewsClick on the development.
The agency said the penalty was imposed after the ED carried out a detailed examination of records, evidence and submissions made by the noticees (PPK NEWSCLICK Studio and Purkayastha).
The ED has a separate money laundering case registered against the portal.
The agency has recorded the statements of more than 25 people in the money laundering case, including that of Purkayastha.
The Delhi Police has also investigated these entities.
The BJP, in 2023, had quoted a New York Times news article to allege that the portal and its promoter were “pushing pro-China agenda” through its stories.
The news article had stated the portal was part of a global network that received funding from American billionaire Neville Roy Singham, who allegedly works closely with the Chinese government media machine.
The ED said its probe found that FDI of Rs 9.59 crore was received (by the company) during the 2018-19 fiscal by “misrepresenting” the nature of business activity in statutory filings, thereby bypassing prescribed sectoral conditions and entry route requirements under FEMA.
It was also detected that foreign inward remittances of Rs 82.63 crore, purportedly received between 2018-19 to 2023-24 financial years, for export of services, were found to be in “contravention” of FEMA provisions due to “misclassification” of exports and “failure” to comply with mandatory reporting requirements, including submission of SOFTEX (used for software or information technology exports) forms.
“The transactions were deliberately structured in a manner that defeated the objectives of the foreign exchange regulatory framework,” the ED said.
