The Enforcement Directorate has accused the British Broadcasting Corporation of deliberately violating rules governing foreign direct investment in the country. The agency has alleged that funds remitted by the BBC group companies to the United Kingdom are illegal and in violation of FEMA rules. The ED has also charged at least one BBC group company of knowingly violating the FDI and foreign exchange rules.
The agency has questioned 10 BBC employees in this regard including its current director and two ex-directors. Officials said that details have been sought from the BBC companies to examine the probable FEMA violations.
The employees, whose statements were recorded on Thursday, have been asked to explain how BBC World Service India Private Limited and BBC Global News India Private Limited were functioning in the country since they were owned 100% by BBC UK.
“The companies of BBC group are 100% FDI companies and still doing broadcasting content services which are not permitted under the FEMA rules and regulations,” a note accessed by CNN-News18 says.
The shareholding of BBC companies as of date according to ED:
1. BBC World Service India Private Limited
British Broadcasting Corporation U.K – 1,55,17,499
BBC Global News Limited, U.K (Previously known as BBC World News Limited) – 1
2. BBC Global News India Private Limited
Equity shares
BBC Global News Ltd, UK – 9,99,847
BBC World Distribution Limited, UK – 1
Preference shares
BBC Global News Ltd, UK – 43,49,457
What is the violation?
CNN-News18 has learnt that the ED probe against BBC began on February 4, 2023. Ten days later income tax officials also reached BBC offices in Mumbai and Delhi.
The inquiries conducted by the agencies so far suggest “prima facie violation of the provisions of Foreign Exchange Management Act, 1999 and its rules and regulations namely Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and other regulation prior to that; which regulate the receipt of Foreign Direct Investment”.
The agency points to a Department for Promotion of Industry and Internal Trade (DPIIT) press note dated September 18, 2019, which capped the FDI in digital media entities at 26%, and a clarification issued on October 16, 2020, which specified the entities that were required to comply:
- Entities uploading/ streaming news and current affairs on websites, apps and other platforms
- News agencies that supply news to digital media entities
- News aggregators which with the help of software/web applications aggregate content from various sources in one location
“The clarification asked eligible entities to align their FDI to 26% within one year of the clarification i.e. by 16 October 2021. Thereafter, the Ministry of Information and Broadcasting, Government of India issued a Public Notice on 16 November 2020 asking all the eligible entities to undertake compliance with the aforementioned press note of DPIIT. One of the companies of the BBC group was aware about the aforesaid FDI violations. However they intentionally avoided taking any action regarding the same FDI rules,” the ED note accessed by CNN-News18 says.
ED officials said that other issues in this regard are still under investigation.
A BBC spokesperson, when asked about the investigating agency’s allegations, said: “We will continue to cooperate fully with the Indian authorities to ensure that we comply with all our obligations.”
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