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LinkedIn: Reviewing MCA Penalty Order on Co, Nadella

LinkedIn said it’s reviewing the order of the ministry of corporate affairs (MCA) to determine its next move after the ministry slapped penalties totalling ₹27.1 lakh on the Microsoft owned professional networking plat form and top executives, citing violation of the significant beneficial owner (SBO) norms un- der the Companies Act, 2013. In an email reply to ET, a LinkedIn spokesperson said: “We comply with the laws of the countries we operate in. We are reviewing the order to determine next steps”. The penalties have been SED imposed on LinkedIn India, Microsoft ON LINKEDIN AND chairman and chief executive Satya TOP EXECUTIVES Nadella, LinkedIn chief executive Ryan Roslansky and seven others. Microsoft acquired LinkedIn in December 2016.

In an order on Wednesday, the Registrar of Companies (RoC) for the national capital region of Delhi and Haryana under the MCA said the company and the officials are liable for penal action for their “failure to take necessary steps as per Section 90-4A (of the Companies Act) to identify the SBO in relation to the company”. The RoC said while the company had reported that LinkedIn Technology Unlimited Company is a registered owner and LinkedIn Ireland Unlimited Company is a beneficial owner with one share from January 11, 2024, its financial statements suggest the beneficial interest was created much earlier. “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),” said the order reviewed by ET.  “Ryan Roslansky was appointed as the global CEO of LinkedIn Corporation on June 1, 2020 and started reporting to Satya Nadella,” added the order by RoC Pranay Chaturvedi. Section 90 of the Companies Act requires companies to disclose their SBO details to the relevant authorities. A penalty of ₹7 lakh has been imposed on LinkedIn India and that of *2 lakh each has been slapped on Nadella and Roslansky. Others who have been penalised are Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi and Henry Chining Fong. “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.

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