In a major development in the ongoing foreign funding compliance row, the Enforcement Directorate (ED) has imposed a total ₹184 crore monetary penalty on news portal NewsClick and its Editor-in-Chief Prabir Purkayastha under the Foreign Exchange Management Act (FEMA). According to the order, the portal’s operating entity PPK NewsClick Studio Private Limited has been fined ₹120 crore, while Purkayastha faces a ₹64 crore penalty.
The ED said the action is based on two principal alleged violations—misrepresentation of foreign direct investment (FDI) and incorrect declaration of services and exports. Investigators claim that the nature, utilisation and reporting of foreign funds were not disclosed in line with regulatory requirements. The penalty, the agency said, was determined after examining financial documents, banking records and fund flow patterns.
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The case dates back to searches conducted in September 2021 at premises in Delhi, when the ED began probing foreign funding and potential money laundering aspects. The agency subsequently reviewed the investment structure, cross-border transactions, service export claims and payment channels. It has asserted that multiple discrepancies emerged during this process, forming the basis for adjudication under FEMA.
According to the ED, documents related to foreign investment showed inconsistencies between declared activities and actual operations. It also alleged a mismatch between services reported as exports and the end-use of funds received. Under FEMA, such violations attract civil monetary penalties rather than criminal punishment, with the quantum linked to the scale and nature of the contravention.
The matter has previously generated political and public debate. In 2023, an international media report was cited by some quarters to question the portal’s foreign funding, including references to an alleged global financing network involving a foreign businessman. The portal, however, has consistently maintained that it is an independent media organisation and that its funding is lawful and transparent, rejecting all allegations.
There was no immediate official response from NewsClick or its Editor-in-Chief following the latest penalty order. Legal experts note that FEMA provides a statutory mechanism to challenge such orders before an appellate authority within a prescribed time frame, and the affected parties may seek a review of the findings.
From a regulatory perspective, the development underscores the compliance obligations of entities receiving foreign investment. Experts point out that disclosure norms, end-use transparency and accurate reporting of services are mandatory, and any deviation can lead to financial penalties even in the absence of criminal charges.
The ED has indicated that examination of related financial aspects may continue, including tracing fund flows, associated entities and potential beneficiaries. Further action cannot be ruled out if additional violations emerge during the ongoing scrutiny.
For now, the case has reignited debate over foreign funding in media organisations, regulatory oversight and financial transparency. The next phase will depend on whether the penalty is challenged and how the matter proceeds before the appellate forum.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
