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WASHINGTON (Reuters) – Senator Elizabeth Warren expressed concern on Monday that Tesla Inc’s board failed to meet its legal duty to protect the company and shareholders following Chief Executive Elon Musk’s takeover of Twitter and questioned the use of Twitter in reports. Tesla employee social media company.
“Despite widespread concerns that Mr. Musk acquired Twitter during his tenure as Tesla CEO, it remains unclear whether Tesla’s board — which holds key decision-making powers within the company — is adequately governing the company, or whether it has a clear Musk’s dual role poses a risk to Tesla,” Warren wrote to Tesla’s board chairman Robin Denholm.
Denholm could not immediately be reached, and Tesla did not respond to a request for comment.
Warren, a progressive Democrat and critic of tech platforms who has clashed with Musk, has previously said that “billionaires like Elon Musk play by a different set of rules than everyone else, Accumulate power for your own benefit. We need a wealth tax and strong rules to hold Big Tech accountable.”
She also raised concerns about possible violations of Securities and Exchange Commission regulations.
Warren cited reports that Musk brought more than 50 Tesla employees to work at Twitter following its $44 billion acquisition of Tesla, which Warren said sparked “concerns about misappropriation of Tesla resources and possible violations of the SEC.” Issues with the rules, potentially violating the SEC’s ‘anti-tunneling’ rules, which are designed to prevent corporate insiders from extracting resources from their companies.”
Musk did not explain how he handled the conflict between his role as Twitter CEO and his position at Tesla, Warren said.
“Twitter relies on advertising revenue from auto companies that directly compete with Tesla, including Audi, Chevrolet, Ford, GM, Jeep, and Volkswagen,” Warren wrote. “As the owner of Twitter, Mr. Musk may decide to run the company to maximize much-needed revenue, even if that includes a large deal for a Tesla competitor and potential harm to Tesla.”
Most car companies have stopped advertising on Twitter.
She asked for “details about how the Tesla board monitored these conflicts of interest and Mr. Musk’s misappropriation of Tesla assets to Twitter, and what guidance the Tesla board had in place to protect Tesla” by Jan. 3. policy”.
The New York Times earlier reported on Warren’s letter, which came as some investors raised questions about Musk’s involvement with Twitter.
Tesla shares, down more than 20 percent since early December, were up 1.2 percent in afternoon trading on Monday.
Leo KoGuan, Tesla’s main individual shareholder, wrote earlier on Twitter that Musk “gave up on Tesla, Tesla does not have a sitting CEO. Tesla needs and should have a working full-time CEO.”
Separately, Twitter users voted for Elon Musk to resign as Twitter CEO in a poll. Some 57.5 percent of the 17.5 million votes cast were in favor, while 42.5 percent opposed Musk’s resignation as Twitter chief, according to the billionaire poll launched Sunday night. More than 17.5 million people voted.
Musk said on Sunday that he would abide by the poll results, but did not say when he would resign if the results indicated he should.
(Reporting by David Shepardson; Editing by Jonathan Oatis and Aurora Ellis)
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