Tech billionaire Elon Musk has defended his company’s 2016 acquisition of a troubled solar panel firm amid a lawsuit claiming he was to blame for a deal that was rife with conflicts of interest and never delivered the profits he promised.
“I think you are a bad human being,” the Tesla founder told Randall Baron, a lawyer for shareholders who was pressing him to acknowledge his mistakes in helping engineer the acquisition of SolarCity.
“I have great respect for the court,” Mr Musk later added, “but not for you, sir.”
The long-running shareholder lawsuit asserts that Mr Musk, who was SolarCity’s largest stakeholder and its chairman, and other Tesla directors breached their fiduciary duties in bowing to his wishes and agreeing to buy the company.
I think I’m funnyElon Musk
In what the plaintiffs call a clear conflict of interest, SolarCity had been founded by Mr Musk and two of his cousins, Lyndon and Peter Rive.
In the Delaware Court of Chancery on Monday, Mr Baron sought to establish that Mr Musk has sought to run Tesla without interference and therefore bears responsibility for any failures.
The lawyer showed a video clip in which Mr Musk said he liked running his own companies because he does not want anyone to make him do what he does not want to do.
As an example of what he characterised as Mr Musk’s imperious management style, Mr Baron mentioned that the chief executive once declared himself “Technoking of Tesla” in a filing with the Securities and Exchange Commission.
The hostility between the billionaire CEO and the plaintiffs’ lawyer dates to at least 2019 and a deposition in which Mr Musk insulted Mr Baron and questioned his professionalism.
On Monday, Mr Baron played clips from that deposition to try to portray Mr Musk’s stance towards what he might regard as criticism.
Mr Musk said on Monday: “I don’t want to be the boss of anything. I prefer to spend my time on design and engineering.”
He told the court he welcomes criticism, adding: “If I’m mistaken, I view critical feedback as a gift.”
He also said his offbeat titles and other quips simply reflect his sense of humour.
“I think I’m funny,” he said, insisting the resulting media attention often plays to Tesla’s benefit.
“If we’re entertaining, people will write stories about us, and the company can save on advertising.”
Regarding Tesla’s all-stock acquisition of SolarCity, Mr Musk asserted that he had nothing to gain financially from it because he owned shares of both companies.
He also argued that SolarCity’s failure to meet aggressive sales forecasts and its loss of market share were only temporary setbacks. He said they reflected his decision to divert Tesla resources towards salvaging production of the Tesla Model 3 electric car – and then running “headlong into a pandemic”.
The effort to salvage Tesla 3 was “all-hands-on-deck” – so desperate that even the company’s lawyers were enlisted in the effort, Mr Musk said, prompting laughter in the court.
His defence noted that SolarCity had been in Tesla’s plans as early as his 2006 master plan for the electric car maker. In saying so, he asserted that the joining of the companies 10 years later was not an emergency bailout as the plaintiffs have alleged.
But Mr Baron pointed out that the 2006 document mentioned only a potential marketing arrangement, not a full-fledged merger or acquisition, between Tesla and SolarCity.
Last August, a judge approved a 60 million dollar settlement that resolved claims made against all the directors on Tesla’s board except Mr Musk without any admission of fault.
That left Mr Musk, who refused to settle, as the sole remaining defendant.