Tesla CEO Elon Musk, the world’s second-richest person is under heavy scrutiny following the 2.6 billion acquisition of SolarCity in 2016. Musk is expected in court on Monday in Delaware where he will be defending his role in the acquisition before the court’s judge, Vice Chancellor Joseph Slights. It is alleged that Tesla board breached their duties in the SolarCity bailout which resulted to the enrichment of the Musk family.
Tesla, a Californian-based company, has since 2016 picked up and has recently produced 200,000 electric cars that have been supplied globally, bringing a very huge income as the cars are expensive. Musk is the only defendant who decided to make it a court fight while the other board members settled for $60 million last year. Sun City board members also said that Tesla board failed to disclose the pertinent details of the deal. They also want Musk to give a payout for the profits from SolarCity stock.
The trial is set to be without a jury and will be conducted by a single judge in a newly furnished courtroom. Delaware, being the corporate home to more than half of US public companies, is the highest venue to settle corporate disputes. Musk, who is not a stranger to litigation, was recently sued by SEC for fraud paying a whopping $20 million. The charges mounted as a result of Musk tweeting on privately taking Tesla which resulted in stock price soaring. They are also facing unprecedented CEO compensation and a series of probes on the company financial position.
In the event that Musk is found guilty, it will be the largest financial judgement against an individual ever witnessed. However, that will not be a big blow to the rich man as his net worth is $177 billion dollars. Musk plans to defend the purchase as a justifiable acquisition in the trial beginning on Monday. The acquisition has resulted in SolarCity making little to almost no profits recently which has drawn it a major setback.
Plaintiffs claim that Musk decision to acquire Solar City amid cut conflicts of interest. Some suggested that while the acquisition refund will not affect his vast wealth, just in case the ruling turns out against him, it will dearly affect his reputation. On the other hand, Musk’s solar deal has recently turned out to be the major threat to Tesla’s future. Tesla, being a company well known for producing and selling electric cars, solar energy as well as a product featuring solar cells. Tesla is also reported to have disbanded its media relation departments since no comment has ever been answered on the concerns raised by the lawsuit.
Musk owns 22.1% of tesla common stock and 21.9% of solar city. Since 2016 Tesla’s shares have skyrocketed with that period witnessing improved incoming from more sales. Musk is the CEO of SpaceX where he is the chief designer for spacecrafts that are to be set on missions to orbit the earth and also other planets, such as Mars. As of 2018, the revenue from SpaceX was estimated to be US$2 billion with a workforce of over 9,500.
Musk has recently been very influential because of his wealth that has opened doors in many other fields including social media, where he has a voice that is well listened to on the Twitter platform.