New Delhi, February 16 – An adjudicating authority under the Foreign Exchange Management Act, 1999 (FEMA) imposed a penalty of ₹184 crore on controversial journalist and production company owner Prabir Purkayastha and his firm for violating FDI norms and illegal foreign inward remittances, an ED official said on Monday.
The adjudicating authority imposed a penalty of ₹120 crore on PPK Newsclick Studio Pvt Ltd and ₹64 crore on Purkayastha, the director of the company, according to a statement issued by the ED.
The adjudication proceedings arose from a complaint filed under Section 16 of FEMA by the Enforcement Directorate alleging violations of FEMA and the rules and regulations made thereunder in connection with the receipt and utilization of foreign funds.
The adjudicating authority observed that the violations were substantial, deliberate, and systemic in nature, involving large-scale foreign exchange transactions and a breach of statutory declarations furnished to regulatory authorities, according to the statement.
Earlier, Purkayastha was also named by the Delhi Police in a charge sheet filed in a court in Delhi in May 2024, accusing him and PPK Newsclick Studio of being a clandestine vehicle designed to funnel funds into it for a nefarious agenda, including stoking and sustaining Delhi riots, a disinformation campaign on Covid-19, stoking farmer's protests, and outright funding of banned Left Wing Extremist (LWE) and Pakistan-sponsored terrorist organizations.
On Monday, the order issued by the adjudicating authority after a detailed examination of records, evidence, and submissions of the notices, stated that FDI amounting to ₹9.59 crore was received during 2018-19 by misrepresenting the nature of business activity in statutory filings, thereby bypassing prescribed sectoral conditions and entry route requirements under FEMA.
The adjudicating authority said that foreign inward remittances aggregating to ₹82.63 crore, purportedly received between 2018-19 and 2023-24 towards export of services, were found to be in contravention of FEMA provisions due to misclassification of exports and failure to comply with mandatory reporting requirements, including submission of SOFTEX forms.
The adjudicating authority also said that the transactions were deliberately structured in a manner that defeated the objectives of the foreign exchange regulatory framework.
The order said, "Prabir Purkayashta, the director of the company, was found to be in charge of and responsible for the conduct of business at the relevant time and was therefore held liable under Section 42 of FEMA."
