25 FAQs on ₹184 Crore FEMA Penalty against NewsClick & Founder Prabir Purkayastha

25 FAQs on FEMA Case study where ED had Imposed penalties of INR 184 crore on news portal known as News Click and on its founder Prabir Purkayastha

The Enforcement Directorate (ED) has imposed penalties totalling ₹184 crore under Section 13(1) of the Foreign Exchange Management Act (FEMA), 1999 on a digital news portal and its founder for alleged foreign exchange violations. The adjudicating authority found that ₹9.59 crore in Foreign Direct Investment (FDI) was received in FY 2018–19 by misrepresenting the nature of business activities and not complying with sectoral conditions and entry route requirements. It was further held that foreign inward remittances amounting to ₹82.63 crore were received between FY 2018–19 and FY 2023–24, of which ₹63 crore was in contravention of FEMA due to misclassification of exports and failure to meet mandatory reporting requirements such as SOFTEX filings. The transactions were described as deliberate and systemic. The founder was held responsible under Section 42 of FEMA. The case also explains FEMA’s civil penalty framework and distinguishes it from criminal proceedings under the Prevention of Money Laundering Act (PMLA), 2002.

1. What is Case where ED had imposed penalties of INR 184 crore?

• Enforcement Directorate (ED) has imposed penalties of INR 184 crore on NewsClick and its founder Prabir Purkayastha for allegedly violating the foreign exchange management act (FEMA) 1999

2. Who is Entity / person where ED had imposed penalties of INR 184 crore?

• The penalties of INR 184 crore are levied on NewsClick and on Prabir Purkayastha like:

(i) Penalties of INR 120 crore on NewsClick

(ii) Penalties of INR 64 crore on Prabir Purkayastha

3. What is Name of investigation agencies involved in NewsClick case?

• NewsClick and its founder are under investigation for violations ranging from anti-national activities to money laundering and violation of the foreign contribution regulation act (FCRA) 2010 by multiple agencies like:

(i) The Enforcement Directorate (ED)

(ii) The Central Bureau of Investigation (CBI)

(iii) The Delhi Police (DP)

(iv) The Income Tax Department (ITD)

4. What is Name of investigation agency Prabir Purkayastha?

• The Delhi Police had arrested Prabir Purkayastha in October 2023.

5. What is Current status of Prabir Purkayastha’s case?

• Presently Prabir Purkayastha is on bail.

6. What is Name of other person involved in News Click’s case?

• ED had issued summons to Neville Roy Singham, an American millionaire presently settled / based in Shanghai but he has not replied against summons issued to him

7. What is Name of newspaper reported NewsClick?

• The New York Times had alleged in its report in 2023 that NewsClick was part of a global network for pushing Chinese propaganda

8. What is Name of other person involved in News Click’s case?

• The New York Times had further alleged in its report in 2023 that Neville Roy Singham has funded NewsClick for pushing Chinese propaganda

9. What are ED’s statements in News Click’s case?

• ED had informed in a statement given on Monday (Feb 16, 2026) that the adjudicating authority under FEMA, 1999 has passed an order in an adjudication proceeding in the case of M/s PPK News click Studio Pvt Ltd based on violations of foreign exchange law for Foreign Direct Investment (FDI) and foreign inward remittances.

10. What are ED’s findings in News Click’s case?

• ED had further informed that “after” detailed examination of records, evidence, and submissions of the notices, the adjudicating authority held that:

(i) FDI INR 9.59 crore was received during Financial Year ending on March 31, 2019 by misrepresenting the nature of business activity in statutory filings. Hence “not” obeyed “prescribed” sectoral conditions “and also” entry route requirements under FEMA, 1999 “both”.

(ii) Foreign inward remittances of INR 82.63 crore were received from financial year ending on March 31, 2019 to March 31, 2024 (6 years) for export of services

(iii) Foreign inward remittances for INR 63 crore were received in contravention of provisions under FEMA, 1999 due to misclassification of exports “and also” failure to comply with mandatory reporting requirements, including submission of SOFTEX forms “both”

(iv) The transactions were deliberately structured in a manner for defeating objectives of the foreign exchange regulatory framework.

(v)Founder was found responsible for conducting business during period from April 01, 2018 to March 31, 2024. Hence founder is held responsible under section 42 of FEMA 1999

(vi) The contraventions were substantial, deliberate and systemic in nature, involving large-scale foreign exchange transactions and breach of statutory declarations furnished to regulatory authorities

11. What is Applicable FEMA 1999’s section in News Click’s case?

• Hence penalties are levied of INR 120 crore on News click Studio Pvt. Ltd and INR 64 crore on Prabir Purkayastha under section 13(1) of FEMA, 1999

12. What is FEMA?

• FEMA is enacted in 1999 for regulating: –

(i) Foreign exchange transactions

(ii) Cross-border payments

(iii) Foreign investments in India “and also” outside India “both”

13. What is Object for incorporating FEMA, 1999?

• To ensure that foreign exchange dealings are complying with Indian laws “and also” Reserve Bank of India (RBI) regulations “both”.

14. What are Irregular Foreign Fundings under FEMA, 1999?

(i) Receiving foreign funds “without” required approvals

(ii) Misclassifying foreign investments. showing equity as consultancy income

(iii) Accepting funds “beyond” permitted limits

15. What are FDI’s violation under FEMA, 1999?

(i) Foreign Direct Investment (FDI) is received in sectors where its restricted/capped

(ii) Issuing shares “without” obeying valuation norms

(iii) Delay in reporting for FDIs to RBI

16. What is Improper use of funds under FEMA, 1999?

(i) Using foreign funds “other than” as declared

(ii) Diverting funds to related parties “without” approval

17. What is Non-Reporting / Late Reporting under FEMA, 1999?

(i) Failure to file “certain” forms like:

(a) FC-GPR

(b) FLA returns

(c) etc.

(ii) Failure to disclose “overseas” transactions

18. What are Hawala / Unauthorized Transfers under FEMA, 1999?

(i) Routing money through “unofficial” channels

(ii) Structuring transactions “to escape” regulations

19. What are Penalties under FEMA, 1999?

(i) FEMA, 1999 is primarily a civil law “not” criminal in most of cases.

(ii) Assets can be attached when the penalties are “not” paid.

(iii) Proceedings for criminal cases are “similar to other” criminal laws.

(iv) Maximum monetary penalty @300% of amount involved under FEMA, 1999

(v) Civil adjudication under FEMA, 1999

(vi) Generally, imprisonment is “not” applicable in most of cases “except” when penalty is “not” applicable under FEMA, 1999

20. What is FEMA, 1999?

(i) FEMA, 1999 is Civil law

(ii) FEMA, 1999 is dealing with regulatory compliance for foreign exchange matters

(iii) FEMA, 1999 is focusing on technical “and also” procedural “both” violations.

(iv) FEMA, 1999 is levying penalties for “procedural” lapses

(v) FEMA, 1999 is “not” requiring “criminal intent” for “procedural” lapses

21. What is PMLA, 2002?

(i) PMLA, 2002 is Criminal law

(ii) PMLA, 2002 is dealing with Proceeds of Crime (PoC) “and also” money laundering “both”

(iii) PMLA, 2002 is focusing on concealment “and also” projection of illegal money as legitimate “both”.

(iv) PMLA, 2002 is applicable for laundering proceeds of a scheduled crime

(v) PMLA, 2002 is requiring “criminal intent” and linkage for predicate offence matter

22. What are Violations under FEMA, 1999?

(i) Violation under FEMA, 1999 is irregular foreign fundings

(ii) Violation under FEMA, 1999 is “not” obeying FDI rules

(iii) Violation under FEMA, 1999 is “non” reporting / delayed reporting

(iv) Violation under FEMA, 1999 is unauthorized cross-border transactions

23. What are Violations under PMLA, 2002?

(i) Violation under PMLA, 2002 is converting / layering money obtained from “certain” crimes like:

(a) Fraud

(b) Corruption

(c) Narcotics

(d) Terrorism

(e) Etc.

(ii) Violation under PMLA, 2002 is hiding the source of illegal funds

24. What are Penalties under PMLA, 2002?

(i) Criminal prosecution is applicable “in most of cases” under PMLA, 2002.

(ii) Minimum imprisonment is 3 years and maximum is 7 years or 10 years in “certain” cases under PMLA, 2002.

(iii) Attachment “and also” confiscation of property “both” are applicable under PMLA, 2002

25. Who is Enforcement agency under FEMA, 1999 and PMLA, 2002?

• ED is enforcement agency under FEMA, 1999 “and also” PMLA, 2002 “both”

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