The Enforcement Directorate (ED) has approached the Supreme Court to challenge a Delhi High Court order that quashed money laundering proceedings against NewsClick. The agency alleges the portal received Rs 92.33 crore in illegal foreign funding. This legal move comes as regulators maintain that the financial inflows were linked to activities aimed at undermining national interests, with significant penalties already levied against the entity and its founder.
The Enforcement Directorate has escalated its legal challenge to the Supreme Court regarding a Delhi High Court decision that had previously set aside money laundering proceedings against NewsClick and its founder, Prabir Purkayastha. The central investigative agency contends that the High Court’s decision to quash the case was premature and bypassed a significant volume of evidence regarding financial irregularities.
At the core of the agency's petition is the claim that US-based businessman Neville Roy Singham operated a network used to funnel Rs 92.33 crore into the digital news portal. Investigators allege that these funds were disguised to weaken Indian institutions and promote specific ideological agendas. The ED claims this funding was channeled through two primary routes, both of which violated standard financial compliance.
Financial details submitted by the agency highlight two specific areas of concern. First, the ED reports an inflow of Rs 9.59 crore labeled as foreign direct investment (FDI) from Worldwide Media Holdings LLC. The agency argues this investment exceeded the mandatory 26 percent foreign investment cap imposed on digital news platforms in India. Second, the investigators flagged Rs 82.63 crore classified as software export receipts, alleging these were fabricated payments for services that were never actually provided.
Beyond the ongoing criminal proceedings under the Prevention of Money Laundering Act (PMLA) and the Unlawful Activities (Prevention) Act (UAPA), the organization faces substantial regulatory penalties. Adjudicating authorities have imposed a Rs 120 crore fine on the entity, PPK NewsClick Studio Pvt Ltd, and a personal penalty of Rs 64 crore on Prabir Purkayastha. These penalties are currently subject to an appeal process before the Appellate Tribunal.
The case has been marked by significant legal delays since 2021, primarily due to various stay orders that have hampered the investigation. The Supreme Court's intervention is now sought to determine if the evidence regarding the allegedly coordinated foreign-funded campaign is sufficient to revive the prosecution. For market observers and entities operating in the digital media space, this case underscores the importance of strict adherence to FDI caps and financial disclosure norms. The next critical development will be the Supreme Court’s decision on whether to admit the agency’s plea and restart the legal proceedings.