Musk told a Delaware court that he was not enriched by the
Tesla-SolarCity deal and that he did not inappropriately pressure fellow board
members to greenlight the transaction, according to CNBC.
A group of Tesla shareholders contends that Musk, who was chairman
of both Tesla and SolarCity at the time of the transaction,
"poisoned" Tesla's ability to fairly evaluate the purchase, wasting
corporate assets in the $2.6 billion deal and harming shareholders, according
to a complaint.
The group of investors, which includes union pension funds
and other institutional investors, argues that SolarCity was a failing
enterprise that faced "likely bankruptcy" were it not for the actions
of Musk and other Tesla board members, who also had large equity stakes in
SolarCity.
The plaintiffs contend Tesla's board breached their
fiduciary duty to Tesla shareholders. They are seeking unspecified monetary
relief in the complaint.
Plaintiffs have already reached a $60 million settlement
with other Tesla directors originally named in the complaint, with the payment
coming from insurance. This group, which included Kimbal Musk, Elon Musk's
brother, did not admit fault.
A key question in the trial is whether Musk, who held 22
percent of Tesla's equity at the time, controlled the transaction, which won
approval from Tesla shareholders.
Musk told the court that buying SolarCity was part of his
"master plan," according to CNBC.
"Since it was a stock-for-stock transaction and I owned
almost the same percentage of both there was no financial gain," Musk
said.
Concerning the case Tesla said in a securities filing that
"we believe that claims challenging the SolarCity acquisition are without
merit and intend to defend against them vigorously."
Dan Ives, analyst at Wedbush Securities, said Wall Street
will be watching the trial "very closely to see the outcome for Musk and
the corporate governance."
The SolarCity deal has been a "black eye" for Musk
and Tesla and a "clear low light" in the company's whirlwind rise,
Ives said in a note.