Tesla is having a rough week, and it just got a little worse.
On Wednesday, a judge handed a small victory to Tesla shareholders,
allowing them to move forward with a lawsuit against CEO Elon Musk and
Tesla's board. The complaint alleges Musk overstepped his bounds when Tesla (TSLA), his electric car company, acquired the solar energy services firm SolarCity.
Under US law, heads of publicly traded corporations are required to act
in shareholders' best interests — and the suit claims that Tesla's $2.6
billion takeover of cash-strapped SolarCity violated that law.
The complaint accuses
Musk of using "his control over the corporate machinery to, among other
things, orchestrate Board approval of the Acquisition." It also claims
the merger amounted to "a bailout" of SolarCity — which was deeply in
debt — and primarily benefited a handful of Tesla board members.
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