Ex-Tesla Executive to Be Questioned Over Claim Musk Duped SolarCity Investors

(Bloomberg) -- Tesla Inc.’s former president of global sales and service will be questioned by lawyers for pension and investment funds that claim billionaire co-founder Elon Musk duped investors into backing his $2.6 billion buyout of a solar-energy firm founded by his cousins.

Jon McNeill, who left the company a year ago to become Lyft Inc.’s chief operating officer, must answer the lawyers’ questions as part of a civil lawsuit, a Delaware judge said on Thursday in a brief order. It’s unclear when McNeill will be deposed or what he’ll be asked about.

The lawsuit, filed in 2016 against Tesla, claims Musk failed to properly disclose that he and other company directors were also shareholders in SolarCity Corp. The company has denied wrongdoing.

McNeill, through Lyft spokeswoman Alexandra LaManna, and Eric Zagar, a lawyer for the plaintiffs, declined to comment. Lawyers for Tesla didn’t immediately return a call.

In March, a judge said the Tesla investors had gathered enough evidence to raise a “reasonable inference that Musk exercised his influence as a controlling stockholder” in connection with the SolarCity deal. The investors also showed that conflicts “diminished the board’s resistance to Musk’s influence,” the judge said.

More than 85 percent of the company’s stockholders voted to back the acquisition of SolarCity, but pension funds that opposed the buyout accuse Musk of wrongly inflating SolarCity’s value. Tesla added two new independent directors in 2017 after investors complained its board was too closely tied to the chief executive officer.

Tesla stock has declined 11 percent in the past year.

The case is In Re Tesla Motors Inc. Stockholders Litigation, No. 12711, Delaware Chancery Court (Wilmington).

--With assistance from Jef Feeley.

To contact the reporters on this story: Christopher Yasiejko in Wilmington, Delaware, at cyasiejko1@bloomberg.net;Carlyann Edwards in Washington at cedwards136@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey

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