BBC Faces FEMA Fine in India | Enforcement Action

Aakhir Tak – In Shorts

The BBC is accused of violating the Foreign Exchange Management Act (FEMA) in India.
India’s Enforcement Directorate (ED) has fined the BBC £314,510 (Rs 3.44 crore).
The investigation started in April 2023, following tax raids on BBC offices.
The BBC received a show-cause notice for failing to reduce foreign ownership.
Three company directors have also been fined for their roles.

Aakhir Tak – In Depth

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India’s financial crime fighting agency, the Enforcement Directorate (ED), has fined British broadcaster BBC £314,510 (Rs 3.44 crore) for alleged violations of the Foreign Exchange Management Act (FEMA) in the South Asian nation, three government sources told Reuters. This BBC FEMA violation has serious implications.

The ED initiated an investigation into the BBC in April 2023 under FEMA. This action followed tax authorities’ searches of the broadcaster’s offices in Delhi and Mumbai two months prior. The ED investigates suspected contraventions of India’s Foreign Exchange Management Act and can “adjudicate and impose penalties” on those found guilty.

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The BBC, which launched a new company for Indian language services in December 2023, received a show-cause notice earlier that year. This notice was for failing to reduce foreign ownership in the company to the permitted limit of 26%, according to the sources.

Consequently, the broadcaster has been fined £314,510, along with a fine for every day since October 15, 2021, for the violations. Additionally, three directors of the company have each been fined £104,836 for their roles in overseeing operations during the period of contravention, the sources added. The fines reflect the ED’s strict enforcement of FEMA regulations.

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The BBC stated that it had not yet received a so-called adjudication order. “We will carefully review any order when it is received and consider next steps as appropriate,” the BBC said in a statement. This suggests the BBC may appeal the fine.

The tax raids in February 2023 followed the release of a BBC documentary about Prime Minister Narendra Modi’s leadership of the state of Gujarat during riots in 2002. At least 1,000 people were killed in the riots, most of them Muslims. The BBC documentary sparked significant controversy.

The Indian government dismissed the documentary as “propaganda” in 2023, blocked its airing, and barred sharing any clips via social media in the country. Modi has denied accusations that he did not do enough to stop the riots and was exonerated in 2012 following an inquiry overseen by the Supreme Court.

Aakhir Tak – Key Takeaways to Remember

The BBC is accused of violating the Foreign Exchange Management Act (FEMA) in India.
The Enforcement Directorate (ED) has fined the BBC £314,510 (Rs 3.44 crore).
The investigation began in April 2023, after tax raids on BBC offices in Delhi and Mumbai.
The BBC was issued a show-cause notice for not reducing foreign ownership as required.
Three directors of the company have also been fined. The BBC FEMA investigation is ongoing.