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BENGALURU: The ministry of corporate affairs has imposed penalties of Rs 2 lakh each on Microsoft-owned LinkedIn India, the tech giant’s India-born chief Satya Nadella and the professional networking site’s Ryan Roslansky for non-compliance with a Companies Act provision, requiring them to disclose “significant beneficial ownership” (SBO).
Nadella and Roslansky have been fined Rs 2 lakh each by the registrar of companies (RoC) for Delhi and Haryana, while other 18 entities, including directors, face penalties ranging between Rs 50,000 and Rs 5 lakh, which in most cases is the maximum provided under the Companies Act.Govt had introduced SBO rules in 2019, requiring disclosure by entities, including individuals, who have significant beneficial ownership in a company. In its 63-page adjudication order the RoC has concluded that Nadella and Roslansky are SBOs.
According to SEC filings, in 2023, Nadella’s compensation was estimated at over $48 million and has earned over $1 billion since taking over in February 2014. Responding to RoC, Microsoft maintained that it had complied with Indian regulations.
Replying to a TOI query, LinkedIn said, “We comply with laws of the countries we operate in. We are reviewing the order to determine next steps.”
Filings made in Jan showed that LinkedIn Technology Unlimited is a registered holder and LinkedIn Ireland Unlimited is a beneficial owner in respect of one share of the subject company, with Jan 11 shown as the date of creation of beneficial interest. RoC argued that it was contrary to the filings made in the financial statements, which showed that the beneficial interest had arisen earlier.
The company responded by saying that the existence of beneficial ownership had been noted in filings since 2014-15 and Jan 11 was “erroneously” shown as the date of creation. RoC argued that the disclosure should have been made since incorporation of the company in 2009 itself.
It also cited provisions of the law providing for a penalty against the registered holder of shares and beneficial holder of shares if the declarations have not been made. Although LinkedIn stated that there are no individuals. who hold more than a 10% stake in Microsoft Corporation. It also said that there is no significant beneficial owner in LinkedIn India.
The registrar concluded that Roslansky is an SBO because of “his ability to exercise control” over the board of directors of LinkedIn India.
“It is also seen that LinkedIn in its own website has itself disclosed that Mr. Ryan Roslansky reports to Mr. Satya Nadella and is part of Microsoft’s senior leadership team. This fact that Mr. Ryan Roslansky is part of Microsoft’s senior leadership team is corroborated from the annual report of Microsoft Corporation. Thus Mr. Satya Nadella is also SBO of the subject company under section 90,” it concluded.
Nadella and Roslansky have been fined Rs 2 lakh each by the registrar of companies (RoC) for Delhi and Haryana, while other 18 entities, including directors, face penalties ranging between Rs 50,000 and Rs 5 lakh, which in most cases is the maximum provided under the Companies Act.Govt had introduced SBO rules in 2019, requiring disclosure by entities, including individuals, who have significant beneficial ownership in a company. In its 63-page adjudication order the RoC has concluded that Nadella and Roslansky are SBOs.
According to SEC filings, in 2023, Nadella’s compensation was estimated at over $48 million and has earned over $1 billion since taking over in February 2014. Responding to RoC, Microsoft maintained that it had complied with Indian regulations.
Replying to a TOI query, LinkedIn said, “We comply with laws of the countries we operate in. We are reviewing the order to determine next steps.”
Filings made in Jan showed that LinkedIn Technology Unlimited is a registered holder and LinkedIn Ireland Unlimited is a beneficial owner in respect of one share of the subject company, with Jan 11 shown as the date of creation of beneficial interest. RoC argued that it was contrary to the filings made in the financial statements, which showed that the beneficial interest had arisen earlier.
The company responded by saying that the existence of beneficial ownership had been noted in filings since 2014-15 and Jan 11 was “erroneously” shown as the date of creation. RoC argued that the disclosure should have been made since incorporation of the company in 2009 itself.
It also cited provisions of the law providing for a penalty against the registered holder of shares and beneficial holder of shares if the declarations have not been made. Although LinkedIn stated that there are no individuals. who hold more than a 10% stake in Microsoft Corporation. It also said that there is no significant beneficial owner in LinkedIn India.
The registrar concluded that Roslansky is an SBO because of “his ability to exercise control” over the board of directors of LinkedIn India.
“It is also seen that LinkedIn in its own website has itself disclosed that Mr. Ryan Roslansky reports to Mr. Satya Nadella and is part of Microsoft’s senior leadership team. This fact that Mr. Ryan Roslansky is part of Microsoft’s senior leadership team is corroborated from the annual report of Microsoft Corporation. Thus Mr. Satya Nadella is also SBO of the subject company under section 90,” it concluded.
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