Beneficial ownership norms in focus as MNCs face greater scrutiny

Experts said that the SBO provisions are facing compliance issues since their introduction on account of interpretational issues

The latest ruling by the Registrar of Companies (RoC) in the LinkedIn Technology Information case for violating significant beneficial ownership (SBO) norms has brought the amended rules into the spotlight. Experts suggest that more entities, particularly multinational companies (MNCs), are expected to face greater scrutiny.

“Companies are closely watching this space. If Satya Nadella (Microsoft CEO) can be deemed a significant beneficial owner, then by that logic, several global CEOs would need to declare themselves as significant beneficial owners,” a senior executive at a Big Four firm said.

Section 90 of the Companies Act deals with identifying individuals who own