Corporate Affairs Ministry Fines LinkedIn India, Nadella for Legal Violations

In a significant development, the Corporate Affairs Ministry has imposed fines on LinkedIn India, a subsidiary of Microsoft, and its key executives, including Microsoft's CEO Satya Nadella, for not complying with the Significant Beneficial Owner (SBO) norms under the Companies Act, 2013. The Registrar of Companies (RoC) NCT of Delhi & Haryana issued a detailed 63-page order outlining the violations by LinkedIn India and nine individuals associated with the company.

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The order highlighted that LinkedIn India and certain individuals failed to disclose details as required under Section 90 of the Companies Act, which mandates companies to reveal their SBOs. Notably, Satya Nadella and Ryan Roslansky, who assumed the role of LinkedIn Corporation's global CEO on June 1, 2020, were identified as SBOs in relation to LinkedIn India but did not report as mandated by Section 901.

The RoC's investigation resulted in penalties amounting to Rs 27,10,800. LinkedIn India was fined Rs 7 lakh for its non-compliance with SBO norms. Additionally, Satya Nadella and Ryan Roslansky were each fined Rs 2 lakh. Other individuals penalized include Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi, and Henry Chining Fong.

The order also pointed out that LinkedIn India and its officers neglected to send out a mandatory notice as per rule 2A 2 of the Companies (Significant Beneficial Owners) Rules, 2018. This oversight led to a contravention of section 905, attracting further penalties under section 450. The non-executive directors were also held liable for this violation due to the presumed clear knowledge about the company's holding structure.

LinkedIn India operates as a subsidiary within the Microsoft Group. The implicated parties have been granted a 60-day period from the receipt of the order to file an appeal with the Regional Director NR.