Satya Nadella, LinkedIn And CEO Ryan Roslansky Fined Rs 27 Lakh For Law Violations, Check Details Here

On May 22, the Ministry of Corporate Affairs (MCA) fined Microsoft-owned LinkedIn India, its chief Satya Nadella, and eight other individuals for violating significant beneficial owner (SBO) norms under companies law, as reported by PTI.

Microsoft acquired LinkedIn in December 2016. According to a 63-page order from the Registrar of Companies (NCT of Delhi & Haryana), LinkedIn India and these individuals broke the SBO norms under the Companies Act, 2013.

The order stated that Satya Nadella and Ryan Roslansky, who was appointed as the global CEO of LinkedIn on June 1, 2020, and reports to Nadella, are SBOs of LinkedIn India. They failed to report this status as required by section 90(1) of the Act, leading to penalties under section 90(10).

AP

Here's what order says

"... 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, reported PTI.

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Section 90 of the Companies Act mandates that companies must disclose details about their SBOs. The failure of LinkedIn India and its officers to identify and report their SBOs led to these penalties.

Total fine

Ryan Roslansky

The RoC imposed a total fine of Rs 27,10,800 on LinkedIn Technology Information Pvt Ltd (LinkedIn India), Nadella, Roslansky, and seven other individuals. LinkedIn India was fined Rs 7 lakh, while Nadella and Roslansky each received a Rs 2 lakh fine. The other fined individuals include Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi, and Henry Chining Fong.

Additionally, the order mentioned that LinkedIn India and its officers did not send a required notice as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018, which violated section 90(5) and is punishable under section 450. All officers, including non-executive directors, are liable due to presumed knowledge of the company's holding structure.

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"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," the order said.

LinkedIn India operates as a subsidiary of the Microsoft Group. The parties fined can appeal the order with the Regional Director (NR) within 60 days of receiving it.