The TLDR: The country’s leading Hindi news group was raided by Income tax officials at the crack of dawn on Thursday. Also raided: Bharat Samachar’s offices in Lucknow as well as the home of its editor. The reason offered by the taxman: “conclusive evidence of tax fraud.” The reason offered by critics: Their unfavourable news coverage of the government.
The targets: Dainik Bhaskar is one of India’s most widely read daily newspapers with a circulation of more than four million copies—and it produces more than 60 regional editions—including Divya Bhaskar, which is very popular in Gujarat. Bharat Samachar is a local Hindi news channel in Uttar Pradesh.
The raids: on Dainik Bhaskar took place in 30 locations across five states—Delhi, Madhya Pradesh, Rajasthan, Gujarat and Maharashtra—and included both offices and homes of the owners. They started early in the morning and were still underway as of 10:00 pm last night—and involved at least 100 tax inspectors. Tax officials also descended on the Lucknow office of Bharat Samachar channel and home of its owner-editor Brajesh Mishra.
We don’t have any details on Bharat Samachar, but here’s what unnamed “government sources” are telling sympathetic outlets like Times of India and ANI about Dainik Bhaskar:
One: The raids have little to do with editorial content and are instead focused on the owners—who are three brothers, Sudhir, Pawan and Girish Agarwal. They control Dainik Bhaskar’s parent company, DB Corp Ltd, which owns 100 companies in a wide range of sectors, including power, real estate and textiles—and has a turnover of Rs 60 billion (6000 crore). Tax officials claim they did not even raid the newspaper’s office in Lucknow or question its editor Om Gaur.
Two: Here’s the essence of allegations:
“There are allegations of huge tax evasion by the [Dainik Bhaskar] group by claiming bogus expenses and purchases using shell entities. The group has floated several paper companies for this purpose, with their employees as shareholders and directors."
Three: More specifically, the parent company is accused of creating shell companies—and then using them to illegally “round trip” money into India. This is when undeclared funds are sent from India to tax havens abroad—and then brought back in the form of foreign direct investment. It’s basically a form of money laundering. These government sources note that the DB Group was one of the entities named in the Panama Papers—which involved the leak of 11.5 million financial and legal records exposing such kinds of fraud.
Four: The raids are part of an investigation that dates back to 2016:
“Sources said that the Bhaskar Group has been on the radar of the tax authorities since 2016 and is being investigated along with other entities under the Black Money Act. 'Many had their accounts in Singapore while their entities were registered in the British Virgin Island,' according to the I-T department. The department has already filed several chargesheets in courts and served notices to many under the Black Money Act.”
Both Bharat Samachar and Dainik Bhaskar claim that they are being punished for their critical coverage of the government. Bharat Samachar employees say their channel has been tough on Yogi Adityanath’s handling of the pandemic and of the Hathras rape case (explained here).
In the case of Dainik Bhaskar, the alleged ‘crimes’ included front-page photos of funeral pyres, and a ground-breaking investigation into bodies floating in the Ganga. Also: its editor, Om Gaur, penned a scathing op-ed for New York Times titled, ‘The Ganges Is Returning the Dead. It Does Not Lie’. The paper put out a defiant message, declaring: “I am independent because I am Bhaskar. What rules Bhaskar is the will of its readers.” And this is how it covered the raids:
And this was The Telegraph’s front page today:
Weird point to note: Bharat Samachar’s owner-editor was the target of a Cobrapost sting back in 2018—which seemed to out him as a Hindutva supporter.
Yes, in recent years, three prominent media outlets have been on the receiving end of tax raid:
NDTV: In 2017, Central Bureau of Investigation officials raided the offices and homes of NDTV founders Prannoy and Radhika Roy over allegations of fraud—the roots of which were in loans taken by the couple to buy back NDTV shares. The CBI claimed this: “NDTV and ICICI entered into a criminal conspiracy to transfer ownership of a news company (NDTV) to a shell company, against banking rules, SEBI Act.” NDTV condemned the raids, saying: “We will not succumb to these attempts to blatantly undermine democracy and free speech in India.”
Quint: In 2018, income tax officials raided its offices and the Delhi home of owner Raghav Bahl—and the office of The News Minute in which Bahl’s company has equity. The allegation: “We are looking at a possible tax evasion of more than Rs. 100 crore in the case of Mr. Bahl himself on account of some long-term capital gains that have accrued to him through the sale of shares of a particular company.”
NewsClick: Earlier this year, the Enforcement Directorate conducted a marathon 113-hour raid on the home of its editor-in-chief Prabir Purkayastha. The raid on the office lasted 36 hours. The case of money laundering revolves around remittances received by NewsClick from foreign companies—which were leaked to Indian Express. And yet the ED has not yet provided NewsClick with a copy of the Enforcement Case Information Report (ECIR)—the equivalent of an FIR that would list the specific allegations.
The bottomline: Raids on unruly media publications is a time-honoured Indian tradition—first wielded as a club by Indira Gandhi. As former Business Standard chairman TN Ninan observes:
“The government has learned that you don’t have to talk to the editor to control the media. You talk to the [owner]. That guy is vulnerable. He can be subjected to a tax raid, an enforcement raid, some other raid… We have freedom within boundaries. There is no safety if you want to test the boundaries beyond a certain point. The system will come after you in some form or the other, and you have to be ready for that.”
Washington Post, The Guardian and The Telegraph offer good overviews of the Dainik Bhaskar raids—including the angry responses of press organisations and Opposition leaders. Times of India offers the case against DB as made by “government sources.” And Article 14 has an excellent deep dive into the war on the Indian press. A related good read: This Newslaundry piece on Dainik Bhaskar’s stellar coverage of the second wave.
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