Elon Musk to defend Tesla’s US$2.6B acquisition of SolarCity on Monday

July 11, 2021 04:40 PM AEST | By Tripti Joshi

Elon Musk to defend Tesla’s US$2.6B acquisition of SolarCity on Monday — Image source: canadianPhotographer56, Shutterstock.com

Shareholders sued Musk for valuation of SolarCity acquisition

Shareholders have taken legal action against Musk and Tesla board members, alleging that the 2016 deal amounted to a bailout of SolarCity.

Apparently, Musk will be the first witness in the trial to defend his role for rescuing SolarCity by way of Tesla’s acquisition of the Company. The acquisition took place for a valuation of US$2.6 billion.

The shareholders allege that the tech czar and his family were beneficiaries of this acquisition and are among the Company's largest shareholders.
Also, the shareholders allege that it unfairly enriched the Musk household, who have been among the many largest shareholders.
They additionally claim that Musk and others failed to disclose all pertinent particulars and breached their fiduciary tasks.

DO READ: What is wrong with Tesla? Is Elon Musk doing something to fix the problem?

However, Tesla CEO has insisted that he was fully recused from the negotiations over the acquisition.

There will be no jury overseeing the verdict in this case, and as per Reuters, Vice-Chancellor Joseph Slights III, Delaware Chancery Court’s judge, will be the supervise and final voice on the matter.

According to Elon Musk, the acquisition of SolarCity was in line with the natural progression in the quest for its environmentally friendly Tesla approach.

Musk’s lawsuits beyond SolarCity

Tesla and Musk face many other legal problems, including one over Musk’s unprecedented CEO compensation package and several federal probes as per the Company’s own financial filings.

Source: © Nito100 | Megapixl.com

In a separate case, the Securities and Exchange Commission sued Musk in 2018 for fraud, and Musk and Tesla settled the case by paying US$20 million each. As one of the settlement terms, Elon Musk had to relinquish his chairman position at Tesla temporarily.

ALSO READ: Does Warren Buffet own any Tesla shares?

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