On 17th February 17, the Enforcement Directorate (ED) fined PPK NEWSCLICK Studio Private Limited, also known as NewsClick, and its founder-editor Prabir Purkayastha ₹184 crore under the Foreign Exchange Management Act (FEMA) for breaking foreign funding regulations. Purkayastha has been charged ₹64 crore while NewsClick has to cough up ₹120 crore.
The order came after the agency submitted a complaint under Section 16 of FEMA, asserting that the corporation had received and used foreign funds in contravention of several legal restrictions. A spokesperson stated, “After examining evidence, records, and submissions from the parties, the adjudicating authority concluded that the firm and its director had contravened foreign exchange rules substantially, deliberately and systematically, in nature, involving large-scale foreign exchange transactions and breach of statutory declarations furnished to regulatory authorities.”
“The authority also found that NewsClick received FDI of approximately ₹9.59 crore during 2018-19 by misrepresenting the nature of its business in statutory filings, thereby avoiding prescribed sectoral conditions and entry-route requirements. Further, foreign inward remittances amounting to ₹82.63 crore, received between financial years 2018-19 and 2023-24, were allegedly misclassified as export proceeds without proper documentation or mandatory SOFTEX form submissions,” the official further outlined.
The ED highlighted that the transactions were “deliberately structured” to undermine the goal of foreign exchange laws. It pointed out that Purkayastha was accountable under Section 42 of FEMA since he was in charge of the firm’s operations at the pertinent time. The fresh directive has been issued by the Adjudicating Authority of FEMA which is a special director rank officer of the ED after finishing the adjudication procedure or end of probe against the two entities.
According to sources, the agency also summoned Neville Roy Singham who is an American billionaire residing in Shanghai as part of its inquiry into NewsClick but he never responded, reported Hindustan Times. He is a supporter of the Chinese Communist Party (CCP) who not only provided financial backing to the media organisation but has also been revealed as a significant anti-India propagandist with Hinduphobic views and advocating for separatism in Kashmir.
Background of the matter
Several agencies, including the Delhi Police, the ED, the Central Bureau of Investigation (CBI) and the Income Tax (IT) department, are looking into NewsClick and Purkayastha for a variety of offences, including money laundering, anti-national activities and breaches of the Foreign Contribution Regulation Act (FCRA).
The company has been accused of obtained funds from China to provoke disturbances in India especially amid the anti-CAA (Citizenship Amendment Act) protests and has links to anti-India voices like Gautam Navlakha. Its founder faced allegations of having ties to LeT (Lashkar-e-Taiba) terrorists, giving money to anti-Hindu Delhi riots accused Sharjeel Imam and Naxals in Delhi Police’s chargesheet.
The ED conducted its first raid on NewsClick’s office in the national capital’s Saidulajab neighbourhood on suspicion of money laundering in September 2021. Purkayastha’s house also subjected to raid in that year. He is one of over 25 individuals whose statements were documented during the investigation. He was taken into custody by Delhi Police on 3rd October 2023 in accordance with the Unlawful Activities Prevention Act. However, he was granted bail by the Supreme Court in May of last year.
