Musk Uncontrollable By The Board…
Elon Musk’s long-time feud with the SEC or the Securities and Exchange Commission has started afresh as a result of a new errant tweet. This has raised serious concerns about the ability of the Tesla board to control Musk, who’s often considered as an unpredictable and strong-willed of the electronic car-making company.
According to Charles Elson, it’s high time that the company board acts. He also expressed his disappointment with the board’s seeming incapacity to take any action. Elson is currently the director at the University of Delaware with the John L. Weinberg Center for Corporate Governance.
The independence as well as its capability to constrain Musk of the board has often been under the scanner. Several members of the board have been found to have close connecting to Musk. That may be through business or family. Board members consist of the likes of his Kimbal Musk, who’s Musk’s brother, a Tesla investor and a restaurateur as well as Antonio Gracias, who has been an investor over a long period time. Gracias also has a seat at the table when it comes to the boards of companies belonging to Musk such as Solar City as well as SpaceX.
Tesla however refused to express any comment regarding this particular article. On Monday, the SEC has accused Musk of violation of his September 29 agreement in regards to the agency, that settled fraud charges regarding securities for having allegedly mislead investors with the aid of a number of inaccurate and baseless tweets posted during last summer that propagated that he had been able to secure the funds required to privatize Tesla at $420 per share. Musk had agreed to settle a fine amounting to $20 million, and had subsequently stepper down from the chairman position for 3 years. He also refrained from tweeting any material information concerning the finances and operations of the company, without prior review and appeal from the company. Tesla also paid up $20 million for the same.
On February 19, Musk’s tweet has enraged the SEC once again. He has been given up till March 11 for providing an explanation to a New York federal as to why he should be able to avoid contempt charges for having tweeted wrong production numbers of 2019.