Tesla's CEO Elon Musk sued for fraud

Tesla, Elon Musk sued and official enquiries made over Twitter claims

Tesla CEO Musk taunts short sellers amid legal scrutiny

Tesla CEO Elon Musk says his "funding secured" tweet last week came after a meeting with Saudi Arabia's government-direct investment fund that left him certain a deal would be reached to take his electric-car company private. He said the Saudi fund approached him multiple times about going private starting nearly two years ago and that he left a July.

Musk wrote that he made the August 7 announcement because he had talked to large investors about his desire to take the company private. Musk and his advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter. The comprehensive plan, known as Vision 2030, was laid out in April by the country's leaders and involves transferring 5 percent of state-owned Saudi Aramco to the investment fund through an initial public offering, expected to be the largest in history. "I am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base", Musk wrote.

The Public Investment Fund approached Musk several months ago to discuss buying a minority stake, but he initially resisted the investment and said there were no plans to issue new shares, according to a different person familiar with the talks at the time.

Musk's surprise comments last week sparked speculation he would need to borrow massive amounts to take Tesla private, a move that could allow the company to operate without requirements for financial reports and other pressures of a publicly traded firm.

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Musk's August 7 tweets helped push Tesla's stock price more than 13 percent above the prior day's close. Tesla's shares briefly turned negative on the news and traded up 0.8 percent at 4:05 p.m.in NY.

Elon Musk stunned investors last week with his tweet. I will now continue to talk with investors, and I have engaged advisors to investigate a range of potential structures and options.

Mr Kalman Isaacs, one of the investors who filed the suit on Friday in a San Francisco court, claimed Mr Musk's tweets were "designed to completely decimate short-sellers".

If and when a final proposal is presented, an appropriate evaluation process will be undertaken by a special committee of Tesla's board, which I understand is already in the process of being set up, together with the legal counsel it has selected. If the board approves the deal, then it would go to a vote of shareholders.

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