RoCは、実質的支配者（SBO）の誤認を理由にLinkedIn Indiaに対して制裁金を科しました。

In the matter of 

M/s LINKEDIN TECHNOLOGY INFORMATION PRIVATE LIMITED

M/s Linkedin Technology Information Private Limited (“The Company”) has done following 2 non-compliances:

1. The registered Violation of Section 89 of Companies Act, 2013

• The registered owner, i.e. LINKEDIN TECHNOLOGY UNLIMITED COMPANY and the beneficial owner, i.e. LINKEDIN IRELAND UNLIMITED COMPANY did not gave declaration as required under Section 89(1) and (2) of the Companies Act.

2. Violation of Section 90 of Companies Act, 2013

• Satya Nadella氏およびRyan Roslansky氏は、同社に関連する実質的支配者（SBO）であり、第90条(1)に基づく報告を怠ったため、同法第90条(10)に基づき罰金の対象となります。
• 同社およびその役員は、同社に関連するSBOを特定するための第90条(4A)に基づく必要な措置を講じませんでした。
• 同社およびその役員は、2018年会社（実質的支配者）規則第2A条(2)に基づく通知すら行っておらず、第90条(5)に違反しました。これについては第450条に罰則が規定されています。
• 社外取締役を含むすべての役員は、各取締役が同社の持株構造について明確に認識していたと推定されるため、この違反に対して責任を負います。

Accordingly, penalty is imposed on the Company and other persons for non-compliance of provisions of Section 89 and 90 of Companies Act.

1. Non-compliance of Provision of Section 89 of the Companies Act, 2013

1.1 Brief Facts of the case

• LinkedIn Technology Information Private Limited（以下「同社」）は、デリーに本店を置く登記企業です。
• 同社は2024年1月29日、以下の内容を申告するMGT-6フォーム（株式の実質的利益に関する申告）を提出しました。
  • 登録株主：LinkedIn Technology Unlimited Company
  • 実質的株主：LINKEDIN Ireland Unlimited Company

With respect  to 1 share of the subject company. Further, the Company reported the date of creation of beneficial interest as 11.01.2024.

• 一方、同社が2022-23年度のAOC-4を通じて提出した財務諸表によると、同社はアイルランドの法律に基づいて設立されたLinkedIn Technology Unlimited Companyが、同社の株式1株に関する名義株主であると記載しています。
• したがって、同社がMGT-6フォームで行った申告は不正確です。
• さらに同社は、1株に関して登録株主と実質的株主が異なるという事実を以前から認識していました。
• そのため、実質的利益の発生が2024年1月11日以前であるにもかかわらず、同社が提出したMGT-6フォームは同法第89条(6)に準拠していません。
• したがって、第89条の不遵守が存在します。

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1.2 Contention of the Company

The Company submitted that:

• LinkedIn Technology Unlimited Companyが保有する株式1株の実質的支配権は、LinkedIn Ireland Unlimited Companyに帰属しており、常にそうでした。
• これは合併時にも開示されています。
• MGT-6フォーム提出の根拠：
  • MGT-6フォームは念のための措置として提出されました。しかし、申告書が同日に提出されたため、発生日が誤って2024年1月11日と記載されました。
  • このような保有形態は、年次報告書で開示されている通り、以前から存在していました。
  • MGT-6の提出は不要であったため、同社はMGT-6フォームを取り下げる意向です。
  • LinkedIn IrelandとLinkedIn Unlimitedの両社は、念のための慎重な対応と第89条の文言に基づき、申告を行いました。
  • 2022-2023年度およびそれ以前の会計年度に提出された財務諸表の情報は正確であり、LinkedIn IrelandがLinkedIn Unlimitedの保有する株式1株の実質的株主です。
  • LinkedIn Indiaは慎重なアプローチを選択し、2013年会社法第89条(2)が「結果として保有するすべての者」という表現を使用しているため、混乱を避ける目的でMGT-6フォームを提出しました。
  • 同社は、SCN（通知書）で規定されている第89条に基づく不遵守は犯していません。

1.3 Analysis of Non-compliance of Section-89

The RoC has analysised that:

• 提出書類によると、LinkedIn Ireland Unlimited Companyは常に同社の株式1株の実質的株主であり、LinkedIn Technology Unlimited Companyは登録株主でした。
• したがって、実質的株主および登録株主が申告を行う義務は、2009年の会社設立後に発生していました。
• 登録株主および実質的株主は、1956年会社法第187C条の規定に従い、フォーム22Bで申告を行うべきでした。
• 提出された通り、実質的利益の発生日は、登録株主および実質的株主によってMGT-4およびMGT-5フォームにおいて誤って2024年1月11日と申告されています。
• 会社は法律の要件に従ってこの電子フォームを提出する必要があったため、取り下げの余地はありません。
• しかし、登録株主および実質的株主によって提出された申告は、申告期限が守られておらず、実質的利益の発生日も誤っているため、第89条(1)および(2)の要件を満たしていません。
• 第89条(5)は、法律で義務付けられた申告が行われない場合、登録株主および実質的株主に対する罰則を規定しています。
• 実質的利益の取得日を誤って開示したことにより、第89条(1)および(2)の規定は満たされていません。
• 不履行日は、2020年12月21日の規定の非犯罪化以降から、2024年2月15日のSCN発行日までの期間として算定されています。

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2. Non-compliance of Provisions of Section 90 of Companies Act

2.1 Brief facts of the case

• The RoC issued a Show Cause Notice stating that Microsoft Corporation, USA, the ultimate holding company, is regularly filing statements of changes in beneficial ownership of securities with Security & Exchange Commission (SEC).
• However, the company has not filed any eform BEN-2 on MCA 21 portal as required under Section 90 of the Act and rules made thereunder.

2.2 Contention of the Company

The Company contended that:

• Section 90 of the Companies Act applies to cases:

• when an individual directly or indirectly holds 10% of the shares of a company;
• when the shares of a company are held by a body corporate, whether there exists an individual who holds majority stake in the member, being a body corporate, or holds majority stake in the ultimate holding company of the member of the company. 

• However, In our case, there is no individual who is a shareholder of LinkedIn India.
• Further, the ultimate holding company is Microsoft Corporation, USA, a listed body corporate, where it is publicly reported that no individual holds a majority stake.
• Accordingly, the Company has not any compliance specified under Section 90 of the Companies Act considering the same is not applicable to the company.

2.3 Analysis of non-compliance of Section 90

• The Company contended that there is no individual who holds a majority stake in the ultimate holding company, i.e., Microsoft Corporation. Thus, the company does not have any SBO. 
• SBO is identified through the test of control or significant influence. 
• As per Rule 2(1)(h) of the Companies (Significant Beneficial Owners) Rules, 2018 for identification of a SBO where the individual has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct holdings alone. 
• Despite the mandatory provisions under rule 2A(2) of the Companies (Significant Beneficial Owners) Rules, 2018, the company did not send the notice as per Form BEN-4 to Linkedln Ireland Unlimited Company [member of the subject company which holds its entire share capital].
• It has lead to contravention of section 90(5) for which penalty has been provided under section 450. 
• Also, the company and its officers failed to take necessary steps to identify its SBO leading to a violation of section 90(4A) of the Act, for which penalty is provided under section 90(11).

1. Beneficial ownership test through holding subsidiary Relationship

1. Holding structure submitted by the Company does not indicate any holding by the Linkedin Corporation, USA, either on its own or through others.
2. However, the Company till date reports Linkedin Corporation, USA, as its holding company in the financial statements.
3. In such a situation, LinkedIn Corporation, USA can only be regarded as a holding company under section 2(87)(i) of the Act, i.e. on account of its ability to control the Board of Directors of the subject company. 
4. If LinkedIn Corporation, USA, did not have the ability to control the Board of Directors of the company, it should have been disclosed as fellow subsidiary and not the holding company in its financial statements. 
5. Linkedin Corporation, USA, has 2 directors, namely Mr. Keith R. Dolliver and Mr. Benjamin O. Orndorff, and such directors hold directorship in the company as well among other directors. Thus, the Board of LinkedIn Corporation does not control the Board of the company and the control has to be seen elsewhere.
6. The senior most officer of the LinkedIn Corporation is Mr. Ryan Roslansky who is the CEO and the President as per the records. 
7. Whereas, Mr. Keith R. Dolliver and Mr. Benjamin O. Orndorff have been shown as Vice-Presidents of LinkedIn Corporation, besides being shown as directors. 
8. As per bylaws of the Linkedin Corporation, USA, the President is the highest officer of LinkedIn Corporation.
9. In any case, the website of the LinkedIn Corporation itself regards Mr. Ryan Roslansky as its leader. Therefore, if LinkedIn Corporation is to be regarded as a holding company of the company, the same can only be due to the exercise of control on the composition of the Board of the subject company. Necessarily, LinkedIn Corporation has to exercise this control through some medium.
10. Therefore, Mr. Ryan Roslansky is a significant beneficial owner[SBO] of the company under section 90 of the Act on account of his ability to exercise control on the Board of Directors of the company, which is evident from the declaration of the company that LinkedIn Corporation is its holding company. 
11. Further, as per information available on company’s website, Mr. Ryan Roslansky reports to Mr. Satya Nadella and is part of the Microsoft’s senior leadership team
12. Therefore, 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 a significant beneficial owner [SBO] of the company under section 90. 

2. Beneficial owner through Reporting Challan test
   1. Employees of Microsoft and LinkedIn who have served on the Board of the company have not taken any remuneration from the company. 
   2. The said directors do not take any remuneration from the subject company, these directors will resign from the company once they exit from the parent entity.
   3. There can be no doubt that they represent the interests of Microsoft Corporation and thus nominees.
   4. Further, the majority of the directors of the subject company are employees of LinkedIn Corporation or Microsoft Corporation whose reporting channel would end up to Mr. Ryan Roslansky or Mr. Satya Nadella. 
   5. The extant rules cover the scenario of “right to exercise” of significant influence or control in any means other than through direct holdings alone. Actual exercise of control or significant influence is not required to be proved. 
   6. Through the layers of reporting channels discussed above, the “right to exercise” of control of the majority of the directors of the subject company by Mr. Ryan Roslansky or Mr. Satya Nadella has been affirmed.

3. Audacity of the Penalty

1. Violation of Section 89 of Companies Act, 2013

• The registered owner, i.e. LINKEDIN TECHNOLOGY UNLIMITED COMPANY and the beneficial owner, i.e. LINKEDIN IRELAND UNLIMITED COMPANY have not given their declarations as required under Section 89(1) and (2) of the Companies Act.
• Therefore, they are liable for a penalty provided under section 89(5) of the Act. 
• The date of default is being reckoned subsequent to the period of decriminalization of the provision w.e.f. 21.12.2020 and upto the date of issue of SCN on 15.02.2024. 

2. Violation of Section 90 of Companies Act, 2013

• Mr. Satya Nadella and Mr. Ryan Roslansky are the SBOs in relation to the 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). 
• Mr. Ryan Roslansky was appointed as the global CEO of LinkedIn Corporation on 1st June 2020 and started reporting to Mr. Satya Nadella. Thus, the period is being reckoned 30 days after his appointment i.e. w.e.f 01.07.2020 onwards till the issuance of the SCN under section 90, which was issued on 15.02.2024. 
• The company and its officers are liable for action under section 90 (11) of the Act for its failure to take necessary steps as per section 90(4A) to identify the SBO in relation to the company.
•  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 period is being reckoned from 01.07.2020 onwards till the issuance of the SCN under section 90, which was issued on 15.02.2024.

4. Penalty Imposed

Following amount of penalty is imposed:

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