ED Files Case Against BBC For Irregularities In Foreign Funding

The Enforcement Directorate is probing the BBC under the Foreign Exchange Management Act for irregularities in foreign funding.

The ED is probing the BBC for irregularities in foreign funding ( Image Source :AFP )

The Enforcement Directorate has filed a case against BBC under the Foreign Exchange Management Act for irregularities in foreign funding, news agency ANI reported. This comes nearly two months after Income Tax officials conducted surveys at BBC India offices across multiple locations.  Officials had stated the survey was conducted over 'irregularities detected on certain tax payments'. A deputy managing editor of the news company has deposed before the agency.

The ED has called for documents and the recording of statements of some company executives under provisions of the Foreign Exchange Management Act (FEMA), the officials said.

The probe is essentially looking at purported foreign direct investment (FDI) violations by the company, they said.

After the Income Tax survey was conducted, BBC issued an official statement claiming that it would continue to comply with authorities. “We will continue to cooperate with the authorities and hope matters are resolved as soon as possible," reads the official statement. 

“The BBC is a trusted, independent media organisation and we stand by our colleagues and journalists who will continue to report without fear or favour,” the statement further stated.

The Income Tax department's marathon "surveys" at BBC's headquarters completed after nearly 60 hours, after authorities created an inventory of financial data from chosen personnel and gathered digital and paper data. y.

According to officials, as part of the survey operation that lasted three days and 57-58 hours, tax authorities inventoried the available goods, recorded the statements of some personnel, and confiscated some papers.

According to them, the survey was conducted to evaluate concerns with foreign taxation and transfer pricing of BBC subsidiary firms.

The Central Board of Direct Taxes (CBDT), the administrative body for the I-T department, had then 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 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".