On Friday, Tesla Inc.’s board chair defended the company’s CEO Elon Musk in a securities fraud trial, where she told jurors that she would have resigned from her position as a director if she had thought Musk lied by tweeting in 2018 that he had “funding secured” to take Tesla private.
In the lawsuit alongside Musk, Tesla and other directors, Tesla board Chair Robyn Denholm is a defendant. Investors claim they lost billions of dollars due to Musk’s Aug. 7, 2018, tweets that he had “funding secured” and “investor support confirmed” to take Tesla private at $420 per share, which was a premium of about 23% to the prior day’s close.
On Friday, she took the stand for around 30 minutes, saying that she would have quit if she had thought the tweets contained false information. She further added, “If I believed that Elon was trying to mislead the public I would have stood down from the board.”
She took over as board chair after Musk agreed to relinquish the role in 2018 as part of a settlement with the U.S. Securities and Exchange Commission, which alleged the tweets were fraudulent.
He and Tesla also paid $40 million as fines to settle the accusations. They did not admit their fault. Denholm said that as the potential buyer, Musk was free to tweet about the deal.
Referring to a Tesla policy requiring disclosures by insiders to be vetted by the company ahead of time,”Because he was tweeting on behalf of himself, the policy doesn’t apply,” Denholm said, referring to a Tesla policy requiring disclosures by insiders to be vetted by the company ahead of time. Musk told the jury earlier this week he could have financed the potential deal from existing Tesla investors as well as a Saudi wealth fund.
“Funding was absolutely not an issue,” Musk told the jury. “It was quite the opposite.” However, Musk, acknowledged he did not have binding agreements with investors for specified amounts, leaving it to the jury to decide if he misled shareholders.
The co-chief executive officer of private equity firm Silver Lake, Egon Durban, mentioned earlier on Friday that he had advised Musk on the going-private proposal, but that there were uncertainties as to whether the transaction could proceed. There was no written commitment by investors in spite of their interest, he added.