New Delhi [India], February 16 (ANI): The Enforcement Directorate (ED) has imposed a penalty of INR 184 crore on PPK Newsclick Studio Pvt Ltd and its director, Prabir Purkayastha, for alleged violations of the Foreign Exchange Management Act (FEMA) 1999.
Of the total amount, a penalty of INR 120 crore has been imposed on the company and INR 64 crore on Purkayastha under Section 42 of FEMA, holding him responsible for the conduct of the company’s business during the relevant period.
The ED stated that the adjudicating authority under FEMA passed an order dated February 16 under the provisions of the Foreign Exchange Management Act, 1999, in an adjudication proceeding in the case of PPK Newsclick Studio Pvt Ltd. The case relates to alleged violations of foreign exchange laws involving foreign direct investment and foreign inward remittances.
In a statement, the ED said the adjudication proceedings arose from a complaint under Section 16 of FEMA, filed by the Directorate of Enforcement, alleging contraventions of FEMA and the rules and regulations made thereunder in connection with the receipt and utilisation of foreign funds.
The adjudicating authority, after examining records, evidence, and submissions of the noticees, held that Foreign Direct Investment (FDI) amounting to approximately INR 9.59 crore was received during the financial year 2018-19 by allegedly misrepresenting the nature of business activity in statutory filings, thereby bypassing prescribed sectoral conditions and entry route requirements under FEMA.
It further held that foreign inward remittances aggregating to INR 82.63 crore, purportedly received between the financial years 2018-19 and 2023-24 towards export of services, were found to be in contravention of FEMA provisions due to alleged misclassification of exports and failure to comply with mandatory reporting requirements, including submission of SOFTEX forms.
‘The transactions were deliberately structured in a manner that defeated the objectives of the foreign exchange regulatory framework,’ the ED said.
The ED added that Purkayastha 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.
‘The adjudicating authority observed that the contraventions were substantial, deliberate, and systemic in nature, involving large-scale foreign exchange transactions and breach of statutory declarations furnished to regulatory authorities. Therefore, in exercise of powers under Section 13(1) of FEMA, the following penalties have been imposed by the adjudicating authority,’ it stated.
(ANI)