ED Slaps Significant Penalty on NewsClick and Founder
The Enforcement Directorate (ED) in India has imposed a substantial penalty of Rs 184 crore on the news portal NewsClick and its founder-editor, Prabir Purkayastha. The penalty, issued on Monday, February 16, 2026, falls under the provisions of the Foreign Exchange Management Act (FEMA), 1999, following an investigation into alleged violations of foreign funding regulations.
Of the total amount, PPK NewsClick Studio Private Limited, the company operating the news portal, has been fined Rs 120 crore, while Prabir Purkayastha faces a personal penalty of Rs 64 crore. The ED stated that the adjudicating authority, after a detailed examination of records and submissions, found the contraventions to be 'substantial, deliberate, and systemic in nature'.
Details of Alleged FEMA Violations
The penalties stem from two primary alleged contraventions of FEMA provisions:
- Misrepresentation of Foreign Direct Investment (FDI): The ED found that approximately Rs 9.59 crore in FDI was received during the financial year 2018-19. This was allegedly done by misrepresenting the nature of business activity in statutory filings, thereby bypassing prescribed sectoral conditions and entry route requirements under FEMA.
- Misdeclaration of Services and Exports: Foreign inward remittances totaling around Rs 82.63 crore, received between FY 2018-19 and 2023-24, were purportedly for the export of services. However, these were found to be in contravention of FEMA provisions due to misclassification of exports and a failure to comply with mandatory reporting requirements, including the submission of SOFTEX forms.
The agency highlighted that these transactions involved 'large-scale foreign exchange transactions and breach of statutory declarations furnished to regulatory authorities'.
Background and Previous Investigations
This latest action by the ED is part of ongoing scrutiny into NewsClick's financial dealings. The Enforcement Directorate had previously raided the premises of NewsClick in September 2021 in connection with a money laundering probe. Furthermore, Prabir Purkayastha was arrested in October 2023 under the Unlawful Activities (Prevention) Act (UAPA) in a separate case, though he was later granted bail by the Supreme Court in May 2024, which deemed his arrest illegal.
In 2023, the ruling Bharatiya Janata Party (BJP) cited a New York Times report that alleged NewsClick was part of a global network receiving funding from American billionaire Neville Roy Singham, who was purportedly linked to the Chinese government media apparatus. NewsClick has consistently refuted these allegations, stating that all funding received was through appropriate banking channels and reported to relevant authorities.
Outlook
The imposition of this significant penalty marks a new development in the ongoing investigations surrounding NewsClick. The news portal has yet to issue an immediate response to the latest penalty order.
5 Comments
BuggaBoom
The ED is clearly being used as a political tool. This penalty is excessive and politically motivated.
Eugene Alta
It's important that all organizations comply with FEMA, but considering NewsClick's history of challenging government narratives, one hopes this investigation is purely financial and not punitive.
Loubianka
Excellent move by the ED. Financial irregularities must be punished. This sets a clear precedent.
Eugene Alta
This is about financial compliance, not journalism. They broke the rules; they pay the price.
Katchuka
Finally, some accountability! These alleged violations were serious. The ED is doing its job.