The Indian Ministry of Corporate Affairs has fined LinkedIn India, along with Microsoft CEO Satya Nadella, LinkedIn CEO Ryan Roslansky, and seven others, a total of Rs 27,10,800. This penalty is for violating significant beneficial owner (SBO) regulations under the Companies Act.
The penalty was imposed because LinkedIn India and the mentioned individuals did not comply with the SBO norms set by the Companies Act 2013. In a detailed 63-page order, the Registrar of Companies (NCT of Delhi & Haryana) explained that LinkedIn India and its officers failed to meet the SBO regulations.
Satya Nadella and Ryan Roslansky are identified as the significant beneficial owners of LinkedIn India. They did not report their status as required by Section 90(1) of the Act, making them liable under Section 90(10). Ryan Roslansky, who became the global CEO of LinkedIn Corporation on June 1, 2020, reports to Satya Nadella.
Violations and Penalties
Section 90 of the Companies Act requires companies to disclose their significant beneficial owners. LinkedIn India did not take the necessary steps to identify and report its SBOs, resulting in the fine. LinkedIn India received a penalty of Rs 7 lakh, while Nadella and Roslansky were each fined Rs 2 lakh.
Other individuals fined include Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi, and Henry Chining Fong. These individuals, along with the company, failed to send a mandatory notice as required by the Companies (Significant Beneficial Owners) Rules, 2018, violating Section 90(5). The penalty for this violation is outlined under Section 450 of the Act.
Right to Appeal
The order notes that all officers, including non-executive directors, are liable due to their presumed knowledge of the company’s holding structure. The company and its officers have the right to appeal the order with the Regional Director (NR) within 60 days from receiving it.
Government’s decision to fine LinkedIn India, its top executives, and other officers highlights the importance of compliance with significant beneficial owner regulations. This action reinforces the need for transparency and accountability in corporate governance.
The fines imposed serve as a reminder to all companies operating in India to adhere strictly to the regulatory requirements set forth by the Companies Act.
