Enforcement Directorate Fines BBC India for Foreign Funding Violations
The Enforcement Directorate (ED) has imposed a significant penalty on the British Broadcasting Corporation (BBC) India and its directors, alleging that the organization violated India’s foreign funding law. According to sources familiar with the situation, the BBC did not reduce its foreign funding in compliance with the 26% cap imposed on digital media organizations.
As part of the penalty, the BBC has been fined a total of over ₹3.44 crore, alongside a daily fine of ₹5,000 for every day beyond October 15, 2021, until compliance is achieved.
An unnamed ED officer stated, “We have issued an adjudication order on Friday, levying a penalty of ₹3,44,48,850 on BBC WS India, along with a fine of ₹5000 for every day after 15.10.2021 till the date of compliance, for violation of provisions of FEMA (Foreign Exchange Management Act), 1999.” Additionally, the directors—Giles Antony Hunt, Indu Shekhar Sinha, and Paul Michael Gibbons—are each facing fines of ₹1,14,82,950 for their roles in overseeing the company during the violation.
A FEMA investigation against BBC India was initiated in April 2023, following findings from a three-day Income Tax survey conducted in February of the same year at BBC offices across Delhi and other cities. The adjudication proceedings commenced after a show cause notice was issued on August 4, 2023, directed at BBC WS India, its three directors, and the finance head.
The ED officer elaborated on the nature of the violation: “On September 18, 2019, DPIIT (Department for Promotion of Industry and Internal Trade) issued a press note 4, stipulating a 26% FDI cap for digital media under the government approval route. However, BBC WS India, a company with 100% FDI, engaged in uploading and streaming news and current affairs through digital media, did not adhere to this cap and maintained its funding at 100%, grossly violating government regulations.”
The Income Tax department’s previous survey highlighted concerns regarding the discrepancy between the income or profits reported by BBC’s various entities and the scale of operations in India. Reports indicated that evidence suggested “the company has not paid taxes on certain remittances,” as noted by the Central Board of Direct Taxes (CBDT) in February 2023.
In response to the developments, a BBC spokesperson stated in February 2023 that the company is committed to cooperating with authorities and hopes to resolve the matter promptly. “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 added.
FEMA, enacted in 1999 following the repeal of the Foreign Exchange Regulation Act (FERA) of 1973, is a civil law designed to consolidate and amend laws related to external trade and payments, promoting orderly development and maintenance of the foreign exchange market in India. The ED has the responsibility to investigate suspected violations of foreign exchange laws and regulations and to impose penalties on those found in contravention.
Regarding the penalty, the BBC spokesperson remarked: “The BBC is committed to operating within the rules of all countries we are based in, including India. At this stage, neither BBC World Service India nor its directors have received any Adjudication Order from the Enforcement Directorate. We will carefully review any order when it is received and consider next steps as appropriate.”