The Enforcement Directorate (ED) has imposed a penalty on British Broadcasting Corporation (BBC) India and its directors for alleged violations of India’s foreign funding regulations.
The agency claims that BBC India failed to reduce its foreign funding in compliance with the 26% cap imposed on digital media organisations, sources familiar with the matter disclosed on Friday.
According to officials, BBC India has been fined a total of ₹3.44 crore for contravening the provisions of the Foreign Exchange Management Act (FEMA), 1999. Additionally, the company faces a daily fine of ₹5,000 for each day of non-compliance beyond October 15, 2021.
“We have issued an adjudication order on Friday, levying a penalty of ₹3,44,48,850 on BBC WS India, along with a daily fine of ₹5,000 for every day after October 15, 2021, until compliance is achieved. This penalty is imposed for violations under FEMA, 1999,” an ED official stated on the condition of anonymity.
In addition to penalizing the company, the ED has also fined BBC India’s directors—Giles Anthony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons—each with a penalty of ₹1,14,82,950 for their role in managing operations during the period of regulatory non-compliance.
The financial probe against BBC India was initiated in April 2023 following findings from an Income Tax (IT) department survey conducted in February 2023. The three-day survey was carried out at BBC offices in Delhi and other cities.
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Based on the IT department’s findings, the ED commenced proceedings under FEMA, which resulted in the issuance of a show-cause notice on August 4, 2023, to BBC WS India, its three directors, and the finance head.
A second ED official provided further insights into the regulatory breach, explaining that on September 18, 2019, the Department for Promotion of Industry and Internal Trade (DPIIT) issued Press Note 4, capping foreign direct investment (FDI) in digital media at 26 per cent under the government approval route.
However, BBC WS India, a company operating with 100% FDI, continued uploading and streaming news and current affairs through digital media without reducing its foreign investment, thus violating Indian regulations.
Efforts to obtain a response from BBC regarding the ED’s adjudication order remained unanswered at the time of reporting.
The Income Tax department’s earlier survey of BBC India had indicated discrepancies between the revenue and profits reported by the company’s various entities and the scale of its Indian operations. Evidence suggested that the company may have failed to pay taxes on certain remittances, the Central Board of Direct Taxes (CBDT), which oversees the IT department, had stated in February 2023.
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In response to the IT survey, a BBC spokesperson had asserted in February 2023 that the company would fully cooperate with authorities and expressed hope for a swift resolution of the matter.
“The BBC is a trusted, independent media organization, and we stand by our colleagues and journalists, who will continue to report without fear or favor,” the spokesperson stated at the time.
FEMA, enacted in 1999 to replace the Foreign Exchange Regulation Act (FERA) of 1973, is a civil law designed to regulate foreign exchange transactions, facilitate external trade and payments, and ensure the orderly development of India’s foreign exchange market.
The Enforcement Directorate is tasked with investigating suspected violations of foreign exchange laws, conducting adjudications, and imposing penalties on entities found guilty of non-compliance.
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