New Delhi [India], July 18 (ANI): The Enforcement Directorate probe into money laundering case against media portal Newsclick has said that the company allegedly laundered funds up to Rs 9.59 crore in FDI “at artificially enhanced prices” in violation of the foreign direct investment norms for the news media outlets which also require that CEO of the company would have to be an Indian citizen, and that all foreign employees working for more than 60 days would need security clearance.
Sources in the probe agency pointed to the financial dealings with Neville Roy Singham, a foreign national, who is “located” in China and infused funds in PPK Newsclick Studio Pvt via WWM, and highlighted the manner in which “foreign influence” is allegedly sought to be exerted through news portals.
The government had in September 2019 announced 26 per cent foreign direct investment (FDI) cap under the government approval route in digital news. Those with more equity were required to bring it down. The norms stipulate that the majority of directors on the board of the company shall be Indian citizens and financial and editorial control will be with Indians.
The Commerce Ministry had decided to liberalise the FDI regime for entities engaged in the News Digital Media Sector and these entities have been permitted FDI upto 26 per cent through the government approval route.
Sources told ANI that investigation showed that businessman Singham is the key source of funding of Rs 28.46 crore which PPK Newsclick Studio Pvt Ltd allegedly received between 2018 and 2021 from abroad.
The Economic Offences Wing of Delhi Police had registered an FIR on basis of which ED had conducted raids on premises of Newsclik in February this year.
It was alleged that PPK Newsclick Studio Pvt Ltd received Foreign Direct Investment (FDI) to the tune of Rs 9.59 crores from M/s Worldwide Media Holdings LLC USA during the financial year 2018-19.
The ED had alleged that the investment was made by greatly overvaluing the shares of the petitioner company to avoid the cap of 26 per cent of FDI in a digital news website and some part of this investment was “diverted/siphoned off”.
The government norms stipulate that the majority of the directors on the company’s board, and the CEO of the company will have to be Indian citizens and, “the entity shall be required to obtain security clearance of all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract or consultancy or in any other capacity for the functioning of the entity prior to their deployment”.
If the government denies or withdraws security clearance, the investee entity will ensure that the concerned person resigns or his/her services are terminated forthwith after receiving such directives from the government.
They said that Newsclick funded the accused of Elgar Parishad case Gautam Navlakha.
ED said Navlakha allegedly received Rs 20.53 lakh from Newsclick. Bappaditya Sinha, member of CPI(M), also allegedly recieved 52.09 lakh, the probe agency said.
ED sources said that during the agency’s raids on the office and residence of Prabir Purkayasatha, Editor-in-Chief and Director of PPK Newsclick in February this year, they seized “documents pertaining to payments to Navlakha and Bappaditya Sinha”.
ED also interrogated Navlakaha who is currently lodged in Taloja Jail in Navi Mumbai, about his association with the Newsclick Editor. ED has got special permission by court to interrogate Navlakha in Taloja Jail.
ED sources said that the probe showed that Purkayasatha and Navlakha have allegedly incorporated a company together with an American defence supplier company. They said e-mails were “exchanged between Purkayasatha and Singham on various issues of interest of China”.
They said “foreign contributions of Rs 28.46 crores were transferred to PPK Newsclick since March 2018 for uploading videos and articles on People's Dispatch Portal, owned by PPK itself”.
While Rs 27. 51 crore was allegedly provided to PPK by Justice and Education Fund Inc, USA, Rs 26.98 Lakhs was allegedly provided by GSPAN LLC, USA.
The Tricontinental Ltd Inc, USA allegedly provided Rs 49.31 lakhsto PPK and funds of Rs 2.03 lakh were allegedly given by Centro Popular, Demidas, Brazil to PPK.
According to ED sources, PPK Newsclick Studio Pvt Ltd was incorporated in April 2018 and was a loss making company but company issued shares of having facevalue of Rs 10/share a enhanced premium of Rs 11, 510/share.
The Information and Broadcasting Ministry had in November last year asked digital news media outlets to comply with conditions that make them eligible for 26 per cent FDI approved by the Union Cabinet in 2019.
The ministry had sought compliance of its earlier orders from digital news portals and websites, aggregators and agencies.
Companies with FDI below 26 per cent were required to intimate the ministry with details including balance sheets, auditor reports, shareholding pattern, names of directors and promoters, confirmation with regard to compliance with pricing and reporting requirements under the FDI policy.
The norms stipulate that the entity shall be required to obtain a security clearance of all foreign personnel likely to be deployed for more than 60 days in a year by way of appointment, contract or consultancy or in any other capacity for the functioning of the entity prior to their deployment”.
If the government denies or withdraws security clearance, the investee entity will ensure that the concerned person resigns or his/her services are terminated forthwith after receiving such directives from the government. (ANI)