Elon Musk under US investigation over Twitter deal: Court filing

Billionaire Elon Musk is under a US federal investigation related to his US$44 billion takeover deal for Twitter. PHOTO: AFP

WILMINGTON, Delaware - Billionaire Elon Musk is being investigated by the US authorities over his conduct in his US$44 billion (S$62.5 billion) takeover deal for Twitter, the social media company said in a court filing released on Thursday.

While the filing said he was under investigation, it did not say what the exact focus of the probes was and which federal authorities were conducting them.

Twitter, which sued Mr Musk in July to force him to close the deal, said attorneys for the Tesla chief executive officer had claimed “investigative privilege” when refusing to hand over documents it had sought.

In late September, Mr Musk’s attorneys had provided a “privilege log” identifying documents to be withheld, Twitter said. The log referenced drafts of a May 13 e-mail to the United States Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).

“This game of ‘hide the ball’ must end,” the company said in the court filing.

The court filing, which asked Delaware Judge Kathaleen McCormick to order Mr Musk’s attorneys to provide the documents, was made on Oct 6 - the same day that the judge paused litigation between the two sides after Mr Musk reversed course and said he would proceed with the deal.

Mr Alex Spiro, an attorney for Mr Musk, told Reuters that Twitter’s court filing was a “misdirection” and asserted that “it is Twitter’s executives that are under federal investigation”.

Twitter declined to comment on Mr Spiro’s statement. It also declined comment when asked by Reuters about its understanding of any investigation into Mr Musk.

The SEC did not immediately respond to a request for comment and the FTC declined to comment.

The SEC has questioned Mr Musk’s comments about the Twitter acquisition, including whether a 9 per cent stake he had built up before announcing his bid had been disclosed late and why it indicated that he intended to be a passive shareholder. Mr Musk later refiled the disclosure to indicate he was an active investor.

In June, the SEC asked Mr Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.

The Information, a technology news site, reported in April that the FTC was scrutinising whether Mr Musk failed to comply with the antitrust reporting requirement relating to an investor’s intentions of being a passive or active shareholder.

Twitter said in June, however, that the takeover deal with Mr Musk had cleared an antitrust waiting period for review by the FTC and US Justice Department.

Judge McCormick has given Mr Musk until Oct 28 to close the acquisition. If the deal does not get done by then, a trial date will be set for November. REUTERS

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