LegalNews – Delhi High Court Sets Aside Cases Against NewsClick Over FDI Allegations
LegalNews – The Delhi High Court has dismissed two separate cases filed against NewsClick and its Editor-in-Chief Prabir Purkayastha concerning alleged violations of Foreign Direct Investment (FDI) regulations. The court described the investigations conducted by the authorities as an improper use of legal procedures and concluded that the allegations did not establish any criminal wrongdoing.
Court Reviews Investment-Related Allegations
The cases originated from investigations carried out by the Delhi Police’s Economic Offences Wing (EOW) and the Enforcement Directorate (ED). According to the allegations, NewsClick’s parent company, PPK Newsclick Studio Pvt Ltd, had received foreign investment amounting to ₹9.59 crore during the financial year 2018-19 in a manner that was claimed to be inconsistent with applicable FDI norms.
Based on the complaint registered by the EOW, the Enforcement Directorate subsequently initiated a money laundering investigation linked to the same set of transactions. Authorities maintained that the investment raised concerns regarding compliance with foreign investment regulations governing media-related businesses.
High Court Finds No Criminal Offence
In its judgment dated May 29, Justice Neena Bansal Krishna examined the nature of the transactions and observed that the investment decision was fundamentally commercial in character. The court held that the facts presented by the investigating agencies did not reveal the commission of any criminal offence.
The judgment further noted that, during the period when the investment was received, there were no restrictions preventing digital media entities from accepting foreign direct investment. As a result, the court found that the foundation of the allegations lacked legal support.
Lack of Supporting Evidence Highlighted
While reviewing the material submitted during the investigation, the court also pointed out that no complaint had been filed by any affected company or stakeholder. This observation was considered significant in assessing the validity of the accusations.
The allegations that company funds had been improperly diverted through payments such as salaries, consultancy charges, and rental expenses were also examined. The court found these claims to be unsupported and insufficient to establish misconduct.
Investigation Criticised by the Court
Justice Krishna remarked that despite an extended period of investigation, the Enforcement Directorate had failed to produce any incriminating evidence linking the accused to criminal activity. The court stated that the records placed before it did not justify the continuation of criminal proceedings.
Consequently, both the EOW case and the related money laundering case were quashed. The ruling represents a significant legal development for NewsClick and its leadership, bringing an end to these particular proceedings after years of investigation.
Other Legal Proceedings Continue
Although the Delhi High Court has set aside the two cases connected to alleged FDI violations, the judgment does not affect other ongoing legal matters involving NewsClick and Prabir Purkayastha. Separate cases, including proceedings under the Unlawful Activities (Prevention) Act (UAPA), continue to remain pending before the relevant courts.
The latest ruling is expected to contribute to the broader legal discussion surrounding regulatory compliance, foreign investment in media organisations, and the standards required for initiating criminal investigations in economic matters