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Tesla faces investigation from the Department of Justice over Elon Musk's claims to take the company private

The company has only received a request to issue documents at the moment and is said to be cooperating in the matter.

  • Published: September 19, 2018 1:23 PM IST
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Tesla Inc is currently facing a criminal probe under the US Department of Justice (DOJ) following the company CEO Elon Musk tweet last month, which stated him to be taking the company private after securing the necessary funds required for it. The news has also been confirmed by Tesla, as reported by Bloomberg.

According to the report, Tesla claims to have received a voluntary request from the DOJ for documents but still hasn’t been handed a subpoena for any formal process. The company stated that information demanded has already been provided to DOJ. In a statement made to the public, the company stated, “We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.”

That said, Elon Musk’s tweet has also risen suspicion in the Securities and Exchange Commission in US, which has in fact issued a subpoena in order to undertake a separate civil investigation based on Musk’s claims of taking the company private, which would have cost about $72 billion according to Reuters. The SEC probe also focuses on whether Tesla had issued misleading numbers regarding manufacturing goals and sales targets. However, it’s still unclear if the investigation requires to go that deep into the case.

Musk had tweeted about his plans back in August, following a conversation with a Saudi Arabia’s Public Investment Fund, which he stated was had been showing interest in taking the company private since 2017. It was also reported that the company’s board never received any proposal from Musk and neither had it considered if the option of going private was the right decision. That said, Musk later confirmed that he has abandoned the plan.

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After the news of the federal investigation was reported, Tesla shares dropped as much as 4.4 percent to $282. The stock dropped to 2.5 percent to $287.60 in New York and have been stated to be down about 7.7 percent this year.

  • Published Date: September 19, 2018 1:23 PM IST