ED initiates FEMA investigation against BBC India

NEW DELHI: The Enforcement Directorate has registered a FEMA case against news broadcaster BBC India for alleged foreign exchange violations, official sources said Thursday, two months after the Income-Tax department surveyed its office premises in February.

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.

On February 14 this year, the I-T department conducted survey operations at the London-headquartered broadcaster’s offices in Delhi and Mumbai as part of an investigation into alleged tax evasion. The survey went on for three days.

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 BBC, after the tax survey, had said they will “continue to cooperate with the authorities and hope matters are resolved as soon as possible.”

“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”.