Tesla Motors’ US$2.6 billion purchase of SolarCity has come under attack from shareholders as four lawsuits were filed in the first weeks of September alleging the company’s board members have breached their fiduciary duties.
According to a regulatory filing with the US Securities and Exchange Commission, the lawsuits are brought by a police pension fund, a teachers’ retirement group, and two individuals, and variously name certain members of the SolarCity board as defendants as well.
“In some cases, SolarCity and members of the SolarCity Board aided and abetted breaches of fiduciary duties and that certain individual defendants would be unjustly enriched by the proposed Merger,” it said.
Tesla dismissed the allegations in the filing, but noted litigation may yet delay, or even derail, the proposed merger, which is scheduled to complete before the end of the year. “Tesla believes that the Actions are without merit,” it said in the filing. It said in a press statement, however, the litigation is unlikely to succeed, or hold up the SolarCity arrangement.
A hearing is scheduled for 18 October.
Tesla posted its thirteenth consecutive quarterly reverse in the quarter ended 30 June, shedding US$293.2 million in the period, equivalent to US$2.09 per share. Its revenues finished at US$1.27 billion, up 33% on the same period of the previous year. Nevertheless, Elon Musk, the biggest shareholder in both Tesla and SolarCity, reckons the SolarCity deal could create a US$1 trillion company.
Meanwhile, SolarCity has continued to slash its guidance for the year, with shares trading nearly a third down on Tesla’s valuation in August.
