Tesla, Elon Musk under scrutiny as SEC issues subpoenas

WASHINGTON • The US Securities and Exchange Commission (SEC) has sent subpoenas to Tesla regarding chief executive Elon Musk's plan to take the company private and his statement that funding was "secured", Fox Business Network reported yesterday, citing sources.

The electric carmaker's shares fell as much as 4 per cent, but cut their losses after Goldman Sachs Group Inc said it was dropping equity coverage of Tesla because it is acting as a financial adviser on a matter related to the carmaker.

Investors viewed the Goldman statement as confirming a tweet from Mr Musk on Monday about working with Goldman, even as the reported subpoenas indicated that the SEC has opened a formal investigation into a matter.

Mr Musk stunned investors and sent Tesla's shares soaring 11 per cent when he tweeted early last week that he was considering taking Tesla private at US$420 per share and that he had secured funding for the potential deal.

On Monday, he said in a blog on Tesla's website that he was in discussions with Saudi Arabia's sovereign wealth fund and other potential backers but that financing was not yet nailed down.

He also tweeted that he was working with Goldman Sachs and private equity firm Silver Lake as financial advisers. However, as of Tuesday, Goldman was still negotiating its terms of engagement with Mr Musk, according to a source.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 17, 2018, with the headline 'Tesla, Elon Musk under scrutiny as SEC issues subpoenas'. Print Edition | Subscribe