Elon Musk, founder and CEO of luxury electric car maker Tesla, said he never wanted to be CEO of Tesla, but added that the EV maker would die if he wasn’t the chief executive. He was testifying in the court on the first day of the trial to defend his position on Tesla’s $2.6 billion all-stock acquisition of SolarCity in 2016.
The lawsuit filed by shareholders, including union pension funds and asset managers, in the Delaware District Court in 2017 alleges that Musk dominated Tesla’s board of directors and strong-armed it to approve the purchase of SolarCity. The shareholders are seeking repayment of the cost of purchasing SolarCity to Tesla.
Musk had to appear before the court as the sole defendant for the trial. The other five board members named in the lawsuit reportedly settled for $60 million last year, along with an additional $16.8 million in legal fees and expenses, paid for by insurance. They will also testifying in the court soon.
Musk insisted in court that the company is controlled by the board, and not him alone. Musk owned a rough 22 percent stake in Tesla at that time, which was not a controlling stake.
A group of shareholders allege that Musk was trying to bailout the beleaguered solar panel company where he also had an investment. They alleged that SolarCity was near bankruptcy at the time of the acquisition.
According to the lawsuit, Musk is said to have directly benefited from the transaction, along with SolarCity’s founders, Lyndon and Peter Rive, who are Musk’s cousins. Musk was also SolarCity’s chairman of the board of directors and its largest stockholder with a 22 percent stake at that time.
Meanwhile, Musk’s attorneys said the acquisition was part of Musk’s longer-term vision to transform Tesla into a transportation and energy company.
Reports suggest that even if Musk is found to be guilty of an improper deal, he could be ordered to pay far less than the $2.6 billion that Tesla paid for SolarCity at the time.
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