The Enforcement Directorate said that the investigation into the money laundering case against media portal ‘Newsclick’ has revealed that the promoters of the media outlet received nearly Rs 38 crores from entities which may be associated with the Communist Party of China, reports Times of India.
According to the reports, an officer probing the money laundering case revealed to the Times of India that Newsclick had financial dealings with a Sri Lankan-Cuban based businessman named Neville Roy Singham, who allegedly funnelled Rs 38 crore to PPK Newsclick Studio Pvt Ltd between 2018 and 2021 from abroad.
The officials, who have traced the money flow of the media outlet, said that Singham is associated with the propaganda arm of the Communist Party of China (CPC).
The ED officials also reportedly said that the investigation had established that part of the money Newsclick allegedly received from foreign sources, which was then routed to Gautam Navlakha, one of the accused in the Elgar Parishad case. The ED had recently interrogated Navlakha in jail for his links with Newsclick’s founder and editor-in-chief Prabir Purkayastha.
In February 2021, the Enforcement Directorate had raided premises and the residences of several officials and journalists associated with NewsClick, a news media portal is most famously known for peddling fake stories. The officials had also raided NewsClick founder and Editor-in-Chief Prabir Purkayastha in connection with a money laundering case pertaining to foreign funding.
Earlier, OpIndia had published a detailed report on foreign funding received by NewsClick and its links with Gautam Navlakha. It was revealed that both Purkayastha and Navlakha were directors of a company called Startacus Software Private Limited. The ED had alleged that funds Purkayastha received for opening a company with Navlakha. Gautam Navlakha was an ‘Independent Partner” of PPK Newsclick Studio LLP.
Most money received from China shows as “export of business”: ED
The anti-money laundering agency said their investigations had shown the media portal received funds from entities named “Justice and Education Fund Inc, US; GSPAN LLC, US; Tricontinental Ltd Inc, USA — all located at the same address — and Centro Popular Demidas, Brazil. The agency said that their search at the places linked to shareholders of PPK Newsclick in February this year had shed light on regular exchanges of emails in connection with the Communist Party of China (CPC).
The ED had also established that Newsclick had received foreign funding of Rs 9.59 crore from a defunct company called Worldwide Media Holdings LLC, Delaware, in April 2018, and another of Rs 20.92 crore later, which has been shown as receipts for “export of services”.
In April 2018, the newly formed company issued shares of face value Rs 10/share at a premium of Rs 11,510/share to Worldwide Media Holidays LLC, registered in Delaware, USA. It is believed that the premium price on share was artificially enhanced to transfer as FDI.
Purkayastha, however, defended the same by claiming that it was ‘fair assessment’ of the company and that the valuation was conducted professionally.
TOI further reports that as per the ED sources, the funds were paid to Newsclick to carry out “specific jobs” to spruce up China’s role in Africa, where it is being accused of high-handedness and predatory capitalism. The ED said they are also investigating payments of large sums to journalists for any irregularities.
The Enforcement Directorate also said that most of the money received by the far-left portal was shown as proceeds from “export of services”. However, Purkayastha has denied the allegations about Singham being a front for CPC and his outlet’s links with the Chinese regime. Instead, Purkayastha claimed that Singham is an American 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.
Over and above this, the agency is also probing huge amount of payment made to journalists for any irregularities. Purkayastha has also been asked about payment of money to Bappaditya Sinha, a CPM member who maintains and runs Twitter accounts of some party leaders. Purkayastha acknowledged links of Newsclick with Sinha but claimed that he was paid for usage of his software and that ‘there is nothing wrong in it’.
China financed money to Newsclick to create a media narrative in favour of Beijing’s interest in India
Besides ED, other investigative agencies are also probing the Chinese links in the case, specifically into the funding by the CPC to build a ‘media narrative’ in India that suits China’s interests. These agencies are looking to find Singham’s links with a senior politician.
During the interrogation, the ED had asked Purkayastha to provide details of services exported by his company, for which it had received about Rs 28.5 crore between 2018 and 2021. The ED had also asked him to explain how Newsclick received money running into crores from dubious foreign sources within a few months of the launch of the company.
The agency had come across one payment of Rs 1.55 crore made to a ninth-class pass electrician by Newclick, who was hired for maintenance at his office. Purkayastha has been asked to provide information on the “nature of work” the latter executed.
Meanwhile, Purkayastha has claimed that the government has sent income tax, the economic offences wing of the Delhi Police and the ED behind them because they are not pro-government. “All of them have the same set of questions regarding the source of our funds and people associated with us,” he claimed.
“If they have anything against us, let them file all these facts in the charge sheet before the court. We are ready to face trial and respond to all those charges,” said the Newsclick founder.
Fearing arrest, Newsclick’s editor-in-chief had approached the Delhi high court seeking anticipatory bail. The High Court has provided him protection till July 29, when the case is listed for hearing.
