Mint Explainer: Why has RoC's order against LinkedIn named Satya Nadella
₹27 lakh on LinkedIn, Microsoft chairman and chief executive officer Satya Nadella, Linkedin CEO Ryan Roslansky and seven others, citing violation of the significant beneficial owner (SBO) norms under the Companies Act, 2013. Microsoft had acquired LinkedIn in 2016. Mint explains what led to the order being issued, and what the companies and executives need to do to mitigate the situation.
The Registrar of Companies (RoC), operating under the aegis of MCA, has alleged that LinkedIn Technology Information Pvt. Ltd—the Indian arm of US-based LinkedIn Corp—had LinkedIn Technology Unlimited Co., listed as a registered holder and LinkedIn Ireland Unlimited Company as a beneficial owner of one share, in filings made in January this year. This had created the beneficiary interest at that time.
This, the RoC said in its order levying the penalties, contrasted with previous filings which showed that the beneficial interest had been created much earlier. This violation of significant beneficial ownership rules under the Companies Act, 2013, triggered the charge from the RoC for Delhi and Haryana. The significant beneficial ownership rules were added to the Companies Act in 2018 for determining the real owners of Indian companies that are not registered as shareholders.
Section 90 of the Companies Act, 2013, lays down the primary intent of the law—which is to identify natural persons having ultimate beneficial ownership in a company. Also, indirect ownership is mandatory for becoming a significant beneficial owner or SBO. The rules provide certain tests for significant beneficial ownership on the basis of the holding of share capital, voting rights and dividend rights.
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