HC grants interim protection to Newsclick founder in foreign funding case

The Delhi High Court on Wednesday granted interim protection from arrest to news portal Newsclick's editor-in-chief and founder in connection with a Delhi Police FIR concerning foreign funding.

Justice Yogesh Khanna issued notice on the plea by Prabir Purkayastha seeking anticipatory bail and sought status report from Delhi Police.

The court sought reply and granted interim protection from arrest to Newsclick director Pranjal Pandey as well on his anticipatory bail plea in the FIR.

The judge said he would pass a detailed order on the pleas later in the day.

The allegations in the FIR, registered by the Economic Offences Wing of Delhi Police, are that the company, PPK Newsclick Studio Pvt Ltd, 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 law.

Senior Advocate Kapil Sibal, appearing for Purkayastha, contended that funding from the US-based company was received by the Newsclick in the year when there was no cap on FDI.

He is a famous journalist and runs a digital media platform. Digital media platforms were allowed to get money from outside... The cap came the following year, Sibal argued.

He further argued that there was no question of siphoning off of funds as the same had been utilised for paying salaries to employees and that there was no loss to the exchequer in the process.

The high court has already granted Purkayastha protection from coercive action in the money laundering case being probed by the Enforcement Directorate, he said.

Sibal informed the court that the investigating agency issued summon to Purkayastha on June 30 to appear before it on Thursday, July 8.

Manjziit S Oberoi, appearing for the State, objected to the anticipatory bail plea, stating that Purkayastha "has directly come to the high court".

The FIR alleges that the investment was made by greatly overvaluing the shares of the company to avoid the alleged cap of 26 per cent of FDI in a digital news website.

It was 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 has caused a loss to the government exchequer, it alleged.

The company, through another petition, has already sought quashing of the Delhi Police FIR on the allegations of foreign funding on the ground that it does not disclose any cognisable offences as alleged.

The petition seeking quashing of the FIR is already listed for hearing on July 29.

The high court had on June 21 directed the ED not to take coercive action against the news portal and its editor-in-chief in connection with the money laundering case.

It had issued notice to the ED on the portal's plea seeking a copy of the ECIR lodged by it in the case.