A significant financial penalty has been levied against the news portal NewsClick and its editor-in-chief, Prabir Purkayastha, by the Enforcement Directorate (ED). The action, taken under the Foreign Exchange Management Act (FEMA), totals ₹184 crore, with ₹120 crore directed at the company PPK NEWS CLICK Studio Private Limited and ₹64 crore against Purkayastha personally. This development underscores the ongoing scrutiny of the organization's financial dealings.
Details of the Enforcement Directorate Action
The Enforcement Directorate has formally issued an order imposing a penalty of ₹184 crore on NewsClick and Prabir Purkayastha. The agency's findings point to alleged contraventions of the Foreign Exchange Management Act (FEMA).
The company, PPK NEWS CLICK Studio Private Limited, which owns the NewsClick portal, has been penalized ₹120 crore.
Prabir Purkayastha, identified as being in charge of the company's affairs during the relevant period, faces a separate penalty of ₹64 crore.
The ED's adjudicating authority deemed Purkayastha liable under Section 42 of FEMA.
The alleged violations center on two primary issues:
Misrepresentation of Foreign Direct Investment (FDI) funds.
Misdeclaration of services and exports.
The ED has stated that it recorded statements from over 25 individuals in connection with the case, including that of Prabir Purkayastha.
Background and Context
The imposition of this penalty follows a period of increased attention on NewsClick's funding sources and operational activities. Reports have previously linked the portal to funding from Neville Roy Singham, an American billionaire reportedly associated with Chinese government media.
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This FEMA action is not the sole legal proceeding involving NewsClick. In the past, the Delhi Police's Special Cell conducted raids on premises linked to the portal and its journalists. During these operations, Prabir Purkayastha, along with writers Paranjoy Guha Thakurta and Urmilesh, were taken to the special cell offices.
Evidence and Findings
The Enforcement Directorate's order is based on its investigation into NewsClick's financial transactions. The agency has reportedly identified discrepancies in how foreign funds were declared and utilized.
Core of the allegations:
The company allegedly misrepresented the nature and purpose of FDI it received.
There are allegations of misdeclaration concerning services rendered and exports made by the entity.
The ED asserts that Purkayastha, by virtue of his position, bears responsibility for these alleged violations.
The agency has gathered statements from a substantial number of individuals, suggesting a broad investigative scope.
Perspectives and Responses
As of the latest reports, a formal response from NewsClick regarding the Enforcement Directorate's penalty is still awaited. This lack of immediate comment leaves the portal's official stance on the findings and accusations unstated.
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The Enforcement Directorate, through its spokesperson and official statements, has provided the details of the penalty and the legal provisions under which it was imposed.
Procedural Aspects
The penalty has been imposed under the provisions of the Foreign Exchange Management Act (FEMA), a law that governs foreign exchange transactions in India.
The total penalty of ₹184 crore is divided between the corporate entity and its editor-in-chief.
The specific sections cited include Section 13(1) of FEMA for the penalty imposition and Section 42 for Purkayastha's liability.
The adjudicating authority, a body within the FEMA framework, has reviewed the evidence and issued the final order.
Future Implications
The substantial financial penalty levied by the Enforcement Directorate is likely to have significant operational and financial implications for NewsClick. The organization will need to address this order, which may involve legal challenges or compliance measures. The proceedings also highlight the government's focus on regulating foreign funding and financial transparency of media organizations.
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Sources Used:
indianexpress.com - Published: 21 minutes ago. Provides details on the penalty amounts and legal sections.
thehindubusinessline.com - Published: 1 day ago. Confirms penalty amounts and lists alleged violations.
news18.com - Published: 9 hours ago. Reiterates penalty details and alleged violations.
theprint.in - Published: 8 hours ago. Mentions penalty amounts and links to global funding networks.
timesofindia.indiatimes.com - Published: 8 hours ago. Reports penalty details and references past raids by Delhi Police.
