Monday April 22, 2019
Home Lead Story Elon Musk Ste...

Elon Musk Steps Down As Chairman Of Tesla

Musk has courted several controversies in recent times by making a series of unusual public comments or appearances.

0
//
Tesla CEO Elon musk, board
Tesla CEO Elon Musk. (VOA)

Coming under pressure from his lawyers and investors of Tesla, tech billionaire Elon Musk has agreed to step down as chairman of the company for three years and pay a $20 million fine in a deal with the US stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges.

The SEC announced the deal on Saturday — two days after it sued Musk in federal court for misleading investors over his post on Twitter last month that he was considering taking Tesla into private ownership.

Musk said that he had “funding secured” for a buyout of the electric-car company at $420 a share, reports The New York Times.

Under the settlement, which requires court approval, Musk will be allowed to stay as CEO but must leave his role as chairman of the board within 45 days. He cannot seek re-election for three years, according to court filings.

Elon Musk, tesla
Musk faces lawsuits for ‘paedo’ remark, Tesla tweet. (Wikimedia Commons)

He accepted the deal with the SEC “without admitting or denying the allegations of the complaint”, according to a court document.

“As a result of the settlement, Elon Musk will no longer be Chairman of Tesla, Tesla’s board will adopt important reforms — including an obligation to oversee Musk’s communications with investors — and both will pay financial penalties,” Steven Peikin, Co-Director of the SEC’s Enforcement Division, said in a statement.

“The resolution is intended to prevent further market disruption and harm to Tesla’s shareholders,” Peikin added.

Musk’s tweet about taking his company private, along with attacks on critics on social media, raised concerns with investors about whether Musk has become too focused on criticism from so-called short-sellers who had been making bets against him and Tesla.

According to the SEC’s complaint, Musk’s misleading tweets caused Tesla’s stock price to jump by over six percent on August 7, and led to significant market disruption.

tesla
Tesla has become the most valuable American carmaker, with its stock worth more than $50 billion. Pixabay

Tesla in recent years has become one of the most valuable American car maker, with its stock worth more than $50 billion.

But its shares have been hit hard since the SEC filed the lawsuit. On Friday, its stock dropped almost 14 per cent.

Musk, a co-founder of Tesla, is the company’s largest stockholder, owning approximately 22 per cent of its outstanding shares.

Also Read: Elon Musk Apologises To UK Driver For Calling Him a ‘Pedo’

The company has recently been struggling to meet audacious production goals for its Model 3 sedan.

Musk has courted several controversies in recent times by making a series of unusual public comments or appearances, including an Internet interview in which he appeared to smoke marijuana. (IANS)

Next Story

4 of 11 Tesla Board Members to Step Down by 2020

In November 2018, Musk was replaced by Robyn Denholm as the chairperson of the company’s board

0
tesla
Visitors inspect Tesla electric cars at Brussels Motor Show, Belgium, Jan. 18, 2019. VOA

In a move that is likely to weaken the powers of Electric Vehicle (EV) maker Tesla Founder Elon Musk and cut some of his strongest allies from the board of directors, the company has said that four of its 11-member board would step down by 2020, thus shrinking the board’s size by more than a third.

The EV maker reportedly said two directors plan to leave its board in June and two more intend to step down next year as part of a move to improve corporate governance of the electric car company.

“Brad Buss, a member of the board since 2009, and Linda Johnson Rice, who joined two years ago, have asked not to be re-elected when shareholders convene on June 11 for Tesla’s annual general meeting, the company said in a preliminary proxy statement,” The New York Times reported late on Friday.

The departing members of the board include Antonio Gracias and Stephen Jurvetson — close friends of Musk who are also directors in SpaceX, Musk’s space launch company.

Tesla CEO Elon musk, board
Tesla CEO Elon Musk. (VOA)

A member of the board since 2009, Buss was also the Chief Financial Officer of solar panel installer SolarCity for two years until Tesla acquired the firm in 2016.

“Shrinking the board will ‘allow it to operate more nimbly and efficiently’,” the company was quoted as saying in The NYT report.

Also Read- Swatch Defeats Apple in Legal War Over Catch-phrase

In November 2018, Musk was replaced by Robyn Denholm as the chairperson of the company’s board.

Musk had agreed to step down as the Chairman of Tesla for three years and pay a $20 million fine in a deal with the stock market regulatory authority, Securities and Exchange Commission (SEC), to resolve securities fraud charges. (IANS)