Tesla ‘to be probed by regulators’ over privatisation plan

Fox News:  

Shares in Tesla have fallen 4% on reports that US regulators are seeking to question executives at the firm about its privatisation plans.

Fox News tweeted that the US Securities and Exchange Commission (SEC) had sent subpoenas to the electric carmaker and was “ramping up” its investigation.

Last week, boss Elon Musk said he was considering taking Tesla private, but some have questioned his intentions.

Both Tesla and the SEC declined to comment on the Fox report.

On Tuesday, Tesla’s board of directors said it had not received a formal proposal from Mr Musk. This is despite the fact that the firm has created a special committee of three directors to evaluate any such proposal.

While US companies are allowed to make announcements via social media, typically they also make a simultaneous regulatory filing. Mr Musk’s tweet may have violated US securities law if it turns out to be untrue, lawyers said.

Mr Musk announced on Twitter on 7 August that he was considering taking Tesla private at $420 (£330) a share, and that “funding [is] secured”.

On Monday, he said financing for the deal had been discussed with Saudi Arabia. The colourful entrepreneur says he wants to de-list the struggling carmaker to take it out of the glare of Wall Street.

If the plan goes ahead, it will be the biggest deal of its kind, valuing the company at $70bn (£55bn).

However, his comments – which caused shares in Tesla to jump 11% before falling back – have landed him a lawsuit from unhappy investors.

Short-sellers, who bet on share price falls, allege he misled the market. Mr Musk, who owns a fifth of the company, has complained previously about “negative propaganda” from short-sellers.

The plaintiff in the case, Kalman Isaacs, alleges the announcement was aimed at “completely decimating” short-sellers.

Mr Musk, who also founded satellite launching company SpaceX, is no stranger to controversy.

Only last month he was forced to apologise for insulting a British diver involved in rescuing a youth football team from a cave in northern Thailand.

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