New Delhi: The Enforcement Directorate’s investigation in a money laundering case against media portal NewsClick has revealed that the company allegedly laundered up to ₹ 9.59 crore in FDI “at artificially inflated prices” through digital news media outlets. violation of foreign direct investment norms. .
Neville Roy Singham, a businessman of Sri Lankan-Cuban origin and accused of being the key person behind pumping money into PPK Newsclick Studios Pvt Ltd, based in China, the investigation has found. Singham is said to be linked to the propaganda wing of the Communist Party of China (CPC), a charge denied by Newsclick editor Prabir Purkayastha, who claimed that Singham was a US citizen working in the software business. was.
The ED action is based on the Delhi Police’s FIR registered a few months ago for allegedly receiving around Rs 30 crore from abroad.
It is alleged that PPK Newsclick Studio Pvt Ltd received Foreign Direct Investment (FDI) of ₹9.59 crore from M/s Worldwide Media Holdings LLC USA during the financial year 2018-19, reports news agency ANI.
Its ED sources claimed that Worldwide Media Holidays LLC (WWM), a company owned by Singham, PPK Newsclick, registered in Delaware, USA and Chinese connections of CPC China, channeled funds into PPK through WWM.
26% FDI in digital news media
In September 2019, the central government had announced a 26 per cent foreign direct investment (FDI) cap under the government approval route in Digital News. Those holding more equity needed to reduce it. The commerce ministry had decided to liberalize the FDI regime for entities engaged in the news digital media sector and these entities have been allowed FDI up to 26 per cent through the government approval route.
As per the norms, the unit will have to obtain security clearance of all foreign personnel to be deployed for more than 60 days in a year through appointment, contract or consultancy or in any other capacity for the functioning of the unit. for their deployment. In case the Government decides to refuse or withdraw the Security Clearance, the Investing Entity shall ensure that the person concerned resigns or his/her services are immediately terminated upon receipt of such directions from the Government.
Allegations of overvaluation of shares
In the FIR, it was alleged that investments were made in a digital news website by over-valuing the shares of the petitioner company to circumvent the alleged cap of 26 per cent of FDI.
Incorporated in 2018 the loss making company issued shares with a face value of ₹10/share at an enhanced premium of ₹11,510/share.
It was further alleged that more than 45 per cent of this investment was diverted for payment of salary/consultancy, rent and other expenses and was used for wrong purposes.
It was alleged that the violation caused loss to the exchequer.
Newsclick alleged Elgar Parishad accused and funded CPI(M)
ED investigation has found that NewsClick gave funds of Rs 20.53 lakh to Elgar Parishad case accused Gautam Navlakha, Communist Party of India (Maoist) IT cell member Bappaditya Sinha. The agency had in February this year seized funding documents from the residence of PPK Newsclick’s editor-in-chief and director Prabir Purkayastha.
ED sources in ANI said investigation has revealed that Purkayath and Navlakha have allegedly incorporated a company in association with a US defense supplier company. He added that “e-mails were exchanged between Purkayath and Singham on various issues of interest to China”. The email revealed that Purkayath and colleagues were “working on activities that promote China’s image”.
Speaking to the daily Times of India, Purkayastha denied the allegations of Singham working for the CPC and his outlet’s ties with the Chinese regime. He said Singham is a US citizen who launched and ran a software company in the US before selling it for around $700-800 million. “All our funds are from legitimate sources and well-known foundations in the US as per RBI guidelines,” Purkayastha said.
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