ED files Foreign Exchange Management Act case against BBC India
The BBC “intentionally avoided taking any action regarding the FDI rules”, said ED sources.
NEW DELHI: The Enforcement Directorate (ED) has summoned several staff members of BBC India, including senior executives after the agency registered a case under Foreign Exchange Management Act (FEMA) against the British news broadcaster’s Indian entity for alleged foreign exchange violations.
According to ED sources, the BBC group was aware of the FDI rules in India, yet it flouted them. “More details of funds remitted by the BBC group companies had been sought from the companies to examine the probable FEMA violations,” officials said, adding: “So far, statements of 10 employees have been recorded in which two are ex-directors and one is the current director.”
The ED has called for documents and the recording of statements of some company executives under provisions of the FEMA, officials said. The probe is essentially looking at purported foreign direct investment (FDI) violations by the company, they said.
On February 14 this year, the I-T department conducted survey operations at the London-headquartered broadcaster's offices in Delhi and Mumbai as part of an investigation into alleged tax evasion. The survey went on for three days.
The BBC is running two entities in India — BBC World Service India Pvt Ltd and BBC Global News India Pvt Ltd, both of which are 100% owned by BBC Group UK.
According to the ED, BBC UK holds 1,55,17,499 shares in BBC World Service India, while one share is held by BBC Global News, UK.
In BBC Global News India, BBC Global News UK holds 9,99,847 equity shares, while BBC World Distribution, UK holds one.
In this Indian entity, BBC Global News UK also holds 43,49,457 preference shares. India had in September 2019 capped FDI in digital media entities at 26%.
However, the BBC “intentionally avoided taking any action regarding the FDI rules”, said ED sources.
The Central Board of Direct Taxes (CBDT), the administrative body for the I-T department, in February had said the income and profits shown by various BBC group entities were "not commensurate" with the scale of their operations in India and tax has not been paid on certain remittances by its foreign entities.
The BBC, after the tax survey, had said they will "continue to cooperate with the authorities and hope matters are resolved as soon as possible."
"The CBDT said the survey found that despite substantial consumption of content in various Indian languages (apart from English), the income/profits shown by various group entities (of BBC) is not commensurate with the scale of operations in India. The department gathered several evidences pertaining to the operation of the organisation which indicate that tax has not been paid on certain remittances which have not been disclosed as income in India by the foreign entities of the group," the CBDT had said.
The action had led to a sharp political debate with the ruling BJP accusing the BBC of "venomous reporting" while the Opposition questioned the timing -- weeks after the broadcaster aired a two-part documentary, "India: The Modi Question".
‘Will cooperate with probe’
London: The BBC will cooperate fully with the Indian authorities, the UK-headquartered media organisation said on Thursday in response to reports of ED action.
(With PTI inputs)