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Combative Elon Musk has defended Tesla’s takeover of SolarCity and scammed lawyer for shareholders suing the deal, on day one of a lawsuit that could see him pay a huge compensation bill if he loses .
A group of Tesla shareholders, including some pension funds, alleged that Musk engineered the $ 2.6 billion acquisition in 2016 to bail out another of his awe-inspiring companies that had run out of options to funding.
SolarCity, which installs solar panels on rooftops, was founded in 2006 by Musk and two of his cousins. Despite Musk’s voting stake in Tesla was only 22%, legal shareholders allege that the strength of his personality allowed him to dominate his board of directors and push directors to close. the case.
Speaking in a dark suit with a white shirt and a sturdy black tie, Musk said SolarCity and Tesla were a natural combination that he had envisioned for years, to achieve what he called a “sustainable energy economy.” .
Since the deal was a merger of shares and owned similar amounts of both companies, Musk said he “had no financial gain one way or the other.”
Musk also insisted that he had no role in negotiating the terms of the deal and that he did not believe it was possible for him to control Tesla, given the power of large institutional shareholders. “Loyalty, T Rowe [Price] and Capital Group doesn’t care what I say, ”he said.
A significant majority of Tesla shareholders approved the SolarCity buyout, and Musk made no secret of his contempt for the dissident investor trial. Other directors settled the case for $ 60 million, but he chose to fight. The trial was originally scheduled to begin in March last year, but was delayed by the pandemic.
At the Delaware courthouse bar on Monday, Musk personally attacked the lawyer who cross-examined him, prominent plaintiffs attorney Randall Baron of Robbins Geller Rudman & Dowd, saying: “I think you are a bad human being. “
Musk added that he had “great respect for the court but not for you.”
When asked, Musk said his contempt for Baron stemmed from the legal issues that ravaged the former firm of attorney, Milberg Weiss, where several former partners pleaded guilty to paying bribes. vin to get shareholders to join class action lawsuits against companies. Musk said Baron had been “surrounded by criminals”.
If the court decides Musk controlled Tesla and the SolarCity deal was not in the best interests of shareholders, he could be required to pay compensation for the amount Tesla is deemed to have overpaid.
Baron had sought in his interrogation to force Musk to admit that he was the singular force of the company, with little to no oversight from the board. Baron showed clips of various interviews Musk had given, including on the TV news show. 60 minutes and in news articles, and pointed out that Tesla board members were often also connected to SolarCity or SpaceX, another Musk start-up.
Musk rarely gave brief answers, seemingly irritating Baron but offering insight into Tesla’s management. Musk said that 2017 to 2019, when Tesla struggled to roll out its Model 3 electric car, “were three of the toughest years of my life.”
He also said he preferred being an engineer to a manager. “To be completely blunt, I don’t want to be the boss of anything,” Musk said, but he had to be CEO of Tesla “or the company was going to die”.
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