The Ministry of Corporate Affairs (MCA) of India has fined LinkedIn India, its CEO Satya Nadella, and eight other individuals for violating Significant Beneficial Owner (SBO) norms under the Companies Act, 2013.
The Registrar of Companies (RoC) for Delhi and Haryana, the MCA's enforcement arm, issued a 63-page order detailing the violations. According to the RoC, LinkedIn India and its officers failed to comply with SBO disclosure requirements, resulting in penalties totaling Rs 27,10,800.
Microsoft, which acquired LinkedIn in December 2016, saw its CEO Satya Nadella and LinkedIn's global CEO Ryan Roslansky identified as significant beneficial owners of LinkedIn India.
The Companies Act, 2013, specifically Section 90, mandates companies disclose details of significant beneficial owners to ensure transparency and prevent illicit activities.
The RoC's order indicated that LinkedIn India and its executives did not adhere to the regulations for identifying and reporting SBOs. Section 90(1) requires companies to disclose SBO details, while Section 90(10) prescribes penalties for non-compliance.
The RoC stated that Nadella and Roslansky are liable for penalties under Section 90(10) due to their failure to report as required by Section 90(1).
The order imposed penalties of Rs 7 lakh on LinkedIn India and Rs 2 lakh each on Satya Nadella and Ryan Roslansky.
Fines were also levied on seven other individuals associated with LinkedIn India, including Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi, and Henry Chining Fong.
LinkedIn India, a Microsoft subsidiary, now faces the challenge of addressing these regulatory concerns.
The company and the penalized individuals can appeal the order with the Regional Director (NR) within 60 days of receiving the order.
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