The Delhi High Court has set aside the Economic Offences Wing FIR and the Enforcement Directorate's money laundering investigation against NewsClick and its founder-editor Prabir Purkayastha, holding that the case lacked the ingredients of fraud or criminal breach of trust.

Court Grants Relief to NewsClick

The Delhi High Court has quashed the FIR filed by the Economic Offences Wing (EOW) and the Enforcement Directorate's (ED) money laundering investigation in the foreign funding case involving NewsClick and its founder-editor Prabir Purkayastha.

Justice Neena Bansal Krishna, in her order, observed that the agencies had carried out extensive investigations without producing concrete evidence of fraud. The court said that even if the allegations in the FIR were accepted at face value, they did not establish offences such as cheating or criminal breach of trust.

Why the court intervened

The High Court said the EOW FIR and the ED's money laundering case did not disclose the essential ingredients of fraud or breach of trust, and that continuing the proceedings would amount to a misuse of the legal process.

The judgment described the continuation of the proceedings as a misuse of the legal process and noted that fraud requires a deceived party, which was absent in the present case.

Origin of the Foreign Funding Case

The case originated from an FIR registered by the Delhi Police in August 2020. Investigators alleged that NewsClick received foreign direct investment (FDI) worth ₹9.59 crore from an American company, Worldwide Media Holdings LLC.

Authorities questioned the valuation of shares, claiming that shares with a face value of ₹10 were issued at a premium of ₹11,510 per share despite the company not being profitable. Investigators alleged that the structure was designed to bypass the 26% FDI cap applicable to Indian media organisations.

Following the FIR, the ED conducted searches at the offices of NewsClick, as well as at premises linked to directors and shareholders under the Prevention of Money Laundering Act (PMLA). Officials seized foreign currency, documents and digital devices during the raids.

The ED later stated that NewsClick had received ₹38.05 crore in foreign funds over three years, including ₹9.59 crore through FDI and ₹28.46 crore classified as export of services revenue.

Parallel Investigations and UAPA Case

The controversy widened in 2023 after BJP MP Nishikant Dubey referred to a New York Times report in Parliament and alleged that some journalists were involved in spreading Chinese propaganda. Union Minister Anurag Thakur also publicly alleged links between businessman Neville Roy Singham and entities associated with NewsClick.

On August 17, 2023, the Delhi Police Special Cell registered a separate case against NewsClick under the Unlawful Activities (Prevention) Act (UAPA) and sections of the Indian Penal Code relating to promoting enmity and criminal conspiracy.

Purkayastha was arrested on October 3, 2023, in connection with that case. The Special Cell questioned 46 individuals and conducted searches at 31 locations linked to NewsClick and journalists associated with the platform. An 8,000-page chargesheet was filed in March 2024.

Multiple Agencies Involved

NewsClick is operated by PPK NewsClick Studio Private Limited and was founded by Purkayastha in 2009.

Over the course of the investigation, multiple agencies became involved, including the Delhi Police Special Cell, the EOW, the Income Tax Department, the ED and the CBI, each examining different aspects of the allegations related to foreign funding and compliance.

Implications of the High Court Order

The Delhi High Court's decision effectively ends the EOW FIR and the ED's related money laundering proceedings against NewsClick and Purkayastha. The court's observations on arbitrary action and the absence of evidence of fraud are likely to be closely examined in future disputes involving financial investigations and media organisations.

The order does not automatically dispose of other proceedings, including the separate UAPA case being pursued by the Delhi Police Special Cell.

ACB files supplementary chargesheet in ₹550 crore CGMSC medical scam

Anti-Corruption Bureau names four more individuals in the ongoing investigation into inflated medical equipment rates and tender rigging in Chhattisgarh.

RAIPUR: The Chhattisgarh Anti-Corruption Bureau (ACB) on Friday intensified its crackdown on the multi-crore Chhattisgarh Medical Services Corporation (CGMSC) scam by filing a supplementary chargesheet against four key individuals. The investigation into the alleged ₹550 crore fraud involves high-level corruption in the procurement of medical reagents and equipment under the state’s ‘Hamar Lab’ scheme.

The chargesheet names Abhishek Kaushal, Director of Recorders & Medicare Systems; Rakesh Jain, Proprietor of Shri Sharda Industries; liaison agent Prince Jain; and Kunjal Sharma, Marketing Head of Diasys India. This development takes the total number of accused against whom chargesheets have been filed to ten.

Cartelization of medical tenders

Investigations conducted by the ACB reveal that three major firms—Mokshit Corporation, Recorders & Medicare Systems, and Shri Sharda Industries—formed a sophisticated syndicate to manipulate the tendering process. By submitting matching product specifications and rates in a coordinated pattern, these companies effectively stifled competition.

Official sources indicated that the firms submitted forged documents to meet eligibility criteria. The syndicate ensured that Mokshit Corporation remained the lowest bidder while other participating firms provided cover bids to validate the process artificially.

Inflated rates bleed exchequer

A significant portion of the ₹550 crore loss to the state exchequer is attributed to the deliberate inflation of Maximum Retail Prices (MRP). Kunjal Sharma of Diasys India is accused of conspiring to submit reagent and consumable prices that were several times higher than the actual market rates.

According to officials, these inflated price lists were approved by CGMSC authorities without proper vetting. This allowed the firms to secure contracts at exorbitant rates, leading to massive financial irregularities in the procurement of essential medical kits.

Massive orders within weeks

The Enforcement Directorate (ED) and Economic Offences Wing (EOW) have previously noted the suspicious speed of these transactions. Documents suggest that CGMSC officials issued orders worth approximately ₹750 crore to Mokshit Corporation within a span of just 27 days.

Notably, these procurements were pushed through despite a lack of immediate demand for the medical equipment. Sources suggested that the specifications in the tender documents were tailored specifically to favor the chosen firms, ensuring that other eligible suppliers were disqualified.

Background of the probe

The massive scam came to light in December 2024, following a formal complaint by former Home Minister Nankiram Kanwar. Kanwar had approached the Prime Minister’s Office and central agencies, including the CBI and ED, alleging systematic looting of public funds within the CGMSC.

Acting on these complaints, the Union Government directed the EOW to initiate a probe. This led to the registration of a First Information Report (FIR) against five individuals, which has since expanded into a wider investigation involving several bureaucrats and businessmen.

Mastermind in federal custody

The investigation gained significant momentum following the arrest of Shashank Chopra, the promoter of Mokshit Corporation, who is considered the mastermind behind the operation. During his interrogation by the ED, Chopra reportedly named several business associates and officials who provided him with administrative protection.

The officials currently under scrutiny include Dr. Anil Parsai, Deepak Kumar Bandhe, Basant Kumar Kaushik, Kamalkant Patanwar, and Khirod Rautia. These individuals are alleged to have facilitated the scam by bypassing standard procurement protocols.

Impact on healthcare sector

The scam has sparked a massive political row in Chhattisgarh, raising concerns over the integrity of public healthcare procurement. While the ‘Hamar Lab’ scheme was intended to provide affordable diagnostic services to the public, the siphoning of funds has severely impacted the scheme's credibility.

Health sector experts suggest that the ₹550 crore loss represents a missed opportunity to upgrade state-run medical facilities. Public interest groups have called for a complete audit of all medical contracts signed during the period in question.

Future course of action

The ACB has confirmed that the investigation into the CGMSC scam remains open. Further supplementary chargesheets are expected as agencies verify the trail of the misappropriated funds and the involvement of other shell companies used for money laundering.