Tesla: Shareholders Want $13 Billion for SolarCity Purchase

0

Tesla shareholders on Tuesday filed a request with a judge in which they ask CEO Elon Musk to return $13 billion to the electric car maker’s coffers. In the petition, investors allege that the executive coerced the other members of the board of directors to approve the purchase of solar panel company SolarCity in 2016.

The company in question, based in San Mateo, California, was founded by two cousins ​​of Tesla CEO Lyndon Rive and Peter Rive, and is engaged in the marketing, manufacturing and installation of residential, commercial and industrial solar panels in the US. At the time of its purchase, the company was experiencing financial difficulties and had Elon Musk himself as president.

According to shareholder attorney Randy Baron, “this case is about whether the SolarCity acquisition was a bailout of financial hardship orchestrated by Elon Musk.” The allegations build on points from an August 2020 trial in which the rest of Tesla’s board directors were cleared of charges in a $60 million settlement. But Musk refused to admit any guilt, and remained a defendant.

What does Musk’s defense say?

In another trial, held in June 2021, Musk claimed that the SolarCity purchase was part of an ambitious 10-year plan to create a vertically integrated company. The entrepreneur sought to revolutionize the generation and consumption of clean energy through SolarCity’s solar panels and Tesla’s car batteries.

According to Bloomberg, at the hearing on Tuesday (18), Musk’s lawyer, Vanessa Lavely, argued with the judge that it was “unlikely” that the billionaire would have that much power over Tesla’s board of directors, since he does not have any control over the positions of members or their compensation.