In a significant development, the Indian corporate affairs ministry has imposed penalties on leading tech executives for failing to adhere to ownership disclosure norms. As per the order passed, LinkedIn India subsidiary and its parent Microsoft CEO Satya Nadella have been fined alongside other senior individuals for not complying with key beneficial ownership reporting under the Companies Act.
The Registrar of Companies found that while LinkedIn India was incorporated post Microsoft's acquisition of the platform in 2016, subsequent ownership changes were not notified as mandated by law. This includes listing Nadella and LinkedIn global head Ryan Roslansky as persons ultimately controlling the India business operations.
A total monetary penalty of Rs. 9 lakh has been charged, with Rs. 7 lakh on LinkedIn India and Rs. 2 lakh each on Nadella and Roslansky. In addition, seven other personnel associated with the firm have also received fines for the lapses. The order cites the failure to appropriately declare significant owners under the requisite corporate rules.
The companies and individuals now have 60 days to appeal the order to higher authorities. The case highlights the need for multinational corporations to stay updated on local compliance requirements, especially concerning ownership and control-related filings. It also sends a message about stringent oversight of all businesses operating in India.
