India accuses BBC of tax irregularities after searching offices

Indian authorities have reported evidence of tax irregularities at a “prominent international media company” following a three-day search at the BBC’s offices in New Delhi and Mumbai this week.

The country’s finance ministry said on Friday that tax officials had uncovered “crucial evidence” of discrepancies between the broadcaster’s income from Indian operations and taxes paid, as well as failure to pay tax on money transfers.

The “income/profits shown by various group entities is not commensurate with the scale of operations in India”, the ministry said in a statement, which did not name the BBC. It did not present specific findings and said evidence gathered would be “further examined”.

The BBC said in a statement that it would co-operate with tax officials and respond to any direct communications from the authorities. Britain’s Foreign, Commonwealth and Development Office did not respond to a request for comment.

The tax investigation came less than a month after the British broadcaster released a documentary that examined Indian Prime Minister Narendra Modi’s actions during deadly interfaith violence in Gujarat two decades ago when he was the state’s chief minister. The government invoked emergency laws to block the documentary from being shown in India.

Indian opposition politicians have criticised the tax probe, saying it is evidence of the government’s harassment of critics and declining press freedom in the world’s biggest democracy. However, India’s western allies broadly stayed silent on the matter.

Washington considers India a crucial counterweight to China in the Asia- Pacific region, while other western capitals see India as an important economic market. France’s president Emmanuel Macron joined Modi in a virtual meeting this week to hail Air India’s purchase of 180 French Airbus planes.

The BBC is a prominent news provider in India. Some 52.5mn Indians visited its websites in March 2021, the last month for which figures are available.

A spokesperson for the broadcaster said on Thursday that some staff had faced lengthy questioning and been made to remain at the offices overnight.

In its statement, the finance ministry defended the tax officials’ conduct, saying they “exercised due care to record statements of only key personnel” and that the search had been carried out in a way that did not disrupt the broadcaster’s output. It accused BBC staff of “dilatory tactics . . . including in the context of producing documents/agreements sought”.

Although the two-part BBC programme India: The Modi Question was only available to watch in the UK, it revived questions in India about Modi’s role in the Gujarat riots, where more than 1,000 people — mostly from the country’s Muslim minority — were killed.

In response to criticism of the tax raids from opposition lawmakers, a spokesperson for Modi’s Bharatiya Janata party this week described the BBC documentary as “propaganda” and accused the broadcaster of “venomous and shallow reporting”.

The finance ministry’s announcement came on the same day the BJP accused billionaire investor George Soros of “imperialistic intentions” and bringing “an onslaught to the economy of India” after the US philanthropist said the stock market woes of Indian conglomerate Adani would help the country’s democracy.

Adani Group’s stock losses rose to more than $100bn after US short seller Hindenburg Research accused the company of fraud. Adani has strongly denied the allegations.

In a speech on Thursday, Soros described Modi and Adani founder Gautam Adani as “close allies”. He argued that Adani’s troubles would “significantly weaken Modi’s stranglehold” on India’s government, “opening the door” to a democratic revival.

Speaking for the BJP at a press conference at the party’s New Delhi headquarters on Friday, cabinet minister Smriti Irani, minister for women and child development and minority affairs, lashed out at Soros, who made his fortune as a hedge fund manager.

Soros “has now declared his ill intentions to intervene in the democratic processes of India”, Irani said.

India’s next general election is scheduled for 2024. Modi’s BJP has won the past two votes, and February survey data gathered by US market researcher Morning Consult pegs his approval rating at 79 per cent in India — far ahead of the other world leaders the company tracks.