NewsClick Tuesday urged the Delhi High Court to quash the cases filed against it for alleged violation of foreign funding laws, saying its prosecution was completely dishonest, malafide and intended to harass the media portal, and now its founder was “sitting in jail” in another case.
The news platform, which has assailed the Economic Offences Wing (EOW) FIR against it as well as the subsequent case initiated by the Enforcement Directorate (ED) for alleged money laundering, asserted it has not violated any guidelines or norms governing foreign direct investment.
“There is no violation of any guidelines; no violation of any tax (law). There is no violation of FDI (norms),” argued senior advocate Kapil Sibal before Justice Saurabh Banerjee.
“This is a completely dishonest, malafide complaint filed to harass a media channel. Now the man is sitting in jail,” said Sibal as he voiced his disapproval of NewsClick founder and editor-in-chief Prabir Purkayastha’s arrest in a case lodged against him under anti-terror law UAPA.
“In the new FIR, they say the money came from China.. You can’t send people to jail like this. He is a 72 year old man,” the senior counsel said. Sibal contended that no offence was made out in the present case as the foreign funds from an investor abroad came in due compliance with the applicable law and practices.
“RBI itself says I have not violated any law. Yet prosecution is going on. ED is going on. The law is in my favour.. I am being prosecuted. Nothing can be more malafide in this country,” he stated. “That’s why poor people are languishing in jail (because) the news portal is against the establishment,” Sibal added.
The lawyer submitted that the claim of foreign funds given to Newsclick having caused a loss to the exchequer cannot be sustained as it was a private transaction.
The counsel for the Delhi Police and ED submitted that the portal’s plea seeking copy of the Enforcement Case Information Report (ECIR) has become infructuous as the Supreme Court has already ruled that the same was not required to be supplied.
PPK NewsClick Studio Pvt Ltd, which owns NewsClick, had moved the high court in 2021 seeking quashing of the criminal cases against the portal over allegations of violation of the FDI law.
The allegations in the FIR, registered by the Economic Offences Wing (EOW) of Delhi Police, are that the company, PPK NewsClick Studio Pvt Ltd, received Foreign Direct Investment (FDI) to the tune of Rs 9.59 crore from M/s Worldwide Media Holdings LLC USA during the financial year 2018-19 in violation of the law.
The FIR has alleged the investment was made after greatly overvaluing the shares of the company to avoid the cap of 26 per cent of FDI in a digital news website.
It has further alleged that over 45 per cent of this investment was diverted/siphoned off for the payment of salary/consultancy, rent and other expenses, which payments are alleged to have been made for ulterior motives.
Therefore, the company has violated the FDI and other laws of the country and caused a loss to the government exchequer, it has claimed. The ED initiated its probe on the basis of a Delhi Police FIR and has conducted searches on the premises of the digital news platform and several other places in connection with the money received from overseas.
On July 7, 2021, the high court had granted interim protection from arrest to Purkayastha in the Delhi Police case and directed him to join the investigation. On June 21, 2021, the high court had directed the ED not to take coercive action against NewsClick and its editor-in-chief in connection with the money laundering case.
Purkayastha was arrested by the Special Cell of the Delhi Police on October 3 in a separate case lodged under anti-terror law Unlawful Activities (Prevention) Act for allegedly receiving money to spread pro-China propaganda. He is in judicial custody. Hearing in the matter would continue on November 8.
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