The Enforcement Directorate has moved the Supreme Court against a Delhi High Court order quashing a money laundering case against NewsClick, a news portal, and its editor-in-chief Prabir Purkayastha on charges of violating FDI rules.
The agency contended that high court quashed its case without examining the money laundering case, and there was an inordinate delay of five months in the pronouncement of the judgment.
The matter is yet to be listed for hearing. The court held that the investment was as per acceptable practices, and the offences of cheating or criminal breach of trust, even if all the allegations were admitted, were not established. The court also noted that a company in the business of digital print media was bound to incur expenses on payment of salaries, consultation fees, rent, etc., and the allegation of siphoning was therefore not tenable.
The EOW’s 2020 FIR alleged that PPK Newsclick Studio Pvt Ltd, NewsClick’s parent company, received foreign direct investment (FDI) of Rs 9.59 crore from Worldwide Media Holdings LLC USA during the financial year 2018-19, in violation of the foreign investment law, which caused a loss to the government exchequer.
In a judgment dated May 29, Justice Neena Bansal Krishna of the high court said the continuation of an FIR registered by the Delhi Police’s Economic Offences Wing (EOW) was “nothing but a gross abuse of the process of law”, and once the FIR under the predicate offence was quashed, the ED’s ECIR in the matter was also liable to be closed. The high court, in its judgment, said the investment was an economic decision, which “did not spell out any criminal offence”, and as per the reply of the Union Ministry of Information and Broadcasting to a letter by the news outlet, there was no cap/restriction on receipt of the FDI in digital media at the relevant time.
In its plea before the top court, the agency contended that the high court quashed its enforcement case information report (ECIR) without examining the PMLA case, and there was an inordinate delay of five months in the pronouncement of the judgment.
