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12 Jul, 2021 14:50

Tesla shareholders want Elon Musk to pay back $2.6 BILLION carmaker spent on SolarCity

Tesla shareholders want Elon Musk to pay back $2.6 BILLION carmaker spent on SolarCity

Elon Musk is expected in court on Monday to testify about Tesla’s 2016 acquisition of another company he co-founded with his family, solar panel producer SolarCity.

Tesla’s shareholders have filed a legal complaint, accusing Musk of profiting from a deal under which the electric carmaker paid $2.6 billion for the struggling firm. The shareholders contend that the deal amounted to a bailout for SolarCity, which was nearly bankrupt at the time, and financially benefited Musk and his family much more than it did Tesla.

Back in 2016 Musk owned a 22% stake in SolarCity, which was founded by his cousins. He was also SolarCity’s chairman of the board, as well as CEO and chairman of Tesla. The deal to acquire SolarCity echoed Musk’s dream of transitioning to sustainable energy.

Tesla’s shareholders are asking the court to order Musk to repay Tesla what the company spent on SolarCity.

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In response, Musk has stated that the deal was fair and approved by the Tesla board and shareholders with no bias or pressure from him. Moreover, Musk insisted he was “fully recused” from negotiations regarding the deal. Last year, Tesla’s directors settled the dispute with the company’s shareholders for some $60 million, paid by insurance, without admitting fault.

If the shareholders win, the case would represent one of the largest judgments against an individual in recorded history.

Musk is the world’s third richest person with a net worth of $168 billion, according to Forbes. For a short period of time earlier this year he topped the list.

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