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In violation of Companies Law: The Union Ministry for Corporate Affairs (MCA) has imposed fines on Microsoft-owned LinkedIn India, tech giant Microsoft CEO Satya Nadella, and eight other persons for violating the significant beneficial owner norms under the Companies Law. Nadella is the Executive Chairman of Microsoft, which acquired the professional networking platform LinkedIn in December 2016.
The Registrar of Companies (RoC) (NCT of Delhi & Haryana) in a 63-page order, stated that LinkedIn India and the other violators defied the Significant Beneficial Owner (SBO) norms under the Companies Act, 2013.
“… Satya Nadella and Ryan Roslansky are the SBOs in relation to the subject company and are liable to a penalty under section 90(10) of the Act, due to their failure to report as per section 90(1). Ryan Roslansky was appointed as the global CEO of LinkedIn Corporation on 1st June 2020 and started reporting to Satya Nadella,” the RoC, which comes under the ministry, said in the order.
The Violations
Section 90 of the Act pertains to SBO. It requires companies have to disclose SBO details. As per the order, a firm and its officers are liable for action for the failure to take necessary steps to identify the SBO in relation to the company. The RoC has slapped penalties totalling Rs 27,10,800 on LinkedIn Technology Information Pvt Ltd or LinkedIn India, Nadella, LinkedIn CEO Ryan Roslansky and seven other individuals.
For SBO norms violations, a penalty of Rs 7 lakh has been slapped on LinkedIn India. Fines of Rs 2 lakh each have been imposed on Nadella and Roslansky, respectively. Other individuals who have been fined are Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi and Henry Chining Fong.
“Also, the company and its officers failed to even send a notice [which was mandatorily required to be sent] as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 leading to a contravention of section 90(5) for which penalty has been provided under section 450. All the officers, including the non-executive directors are liable for this violation due to the presumption of clear knowledge on part of each of such directors about the holding structure of the company,” it said.
Notably, LinkedIn India came into existence after it was established as a subsidiary of Microsoft Group. There is a provision to file an appeal against the order with the Regional Director (NR) within 60 days from the date of receipt of this order.
(With PTI inputs)
