Elon Musk insists that Tesla Inc’s board controls it, but he also stated that the electric vehicle maker “would die” if he was not the chief executive. He ended Monday’s first day of testimony in defense of Tesla’s acquisition of SolarCity in 2016.
Union pension funds and asset managers sued Tesla, alleging that the celebrity CEO manipulated the board of directors to deplete the company’s assets through the $2.6 billion all stock deal for SolarCity.
At the time, the CEO owned approximately 22% of SolarCity and Tesla, which were founded by his cousins. Some Tesla shareholders claimed that the deal was intended to bail out Musk’s investment.
Musk began a two week trial in Wilmington, Delaware. He wore a dark suit and white shirt, with a slightly wavy dark tie.
Elon Musk under fire again: Tesla CEO to testify over SolarCity acquisition
Beginning Tuesday, board members and other participants in the deal will be testifying. Musk will then return to the witness stand.
Musk is accused of dominating board discussions and pushing Tesla to pay more money for SolarCity. He also misled shareholders about the company’s declining financial health.
Musk stated before the court that SolarCity was handled by the Tesla board and that he wasn’t part of the board that negotiated the terms.
He testified that he didn’t know what had happened.
Musk was calm during cross-examination by shareholder attorney Randall Baron. However, Baron’s yes/no questions often resulted in lengthy and meandering answers.
Musk once called Musk a “bad human being” at one point.
Baron wanted to know if the board had vetted his Technoking title which he claimed in March.
He said, “It generated lots of free press and Tesla does not advertise and it’s useful to general sales.”
He called the title a joke, saying “I think I’m hilarious.”
Tesla shares closed at $685.75 on Monday, up 4.4%.
This designation would place a stricter legal standard on the deal and increase the chance that the court will find it unfair.
Shareholders asked the court for Musk to pay back Tesla the amount it spent on the deal.
Evan Chesler, Musk’s attorney, questioned him for approximately an hour and asked him to explain his relationship with the board.
Musk replied, “I’d like to say good.”
They are hardworking and competent. They offer sound advice and act with integrity for shareholders.
He stated that he didn’t set the pay for directors nor had the power to fire or hire them.
He stated that he did not benefit from the deal because he held the same stock percentage in both companies.
He stated that the merger was intended to combine Tesla’s battery business and SolarCity’s sustainable power generation.
He testified that there was no financial gain. Legal experts say that the judge will look for evidence that Musk threatened board members, or that directors believed they were unable to stand up against him.
Brian Quinn, a Boston College Law School professor, said that “It would surprise most people if he came out and said that he doesn’t control here.”
“Because it’s obvious that he acts exactly like he does.”
Tesla’s directors settled the same lawsuit for $60 million. This was paid by insurance without admitting any fault.