US senator warns Tesla board about Musk's actions since taking over Twitter

By Ovunc Kutlu

ISTANBUL (AA) - A US senator has warned Tesla’s board of directors about CEO Elon Musk's role at the electric carmaker since his controversial takeover of the social media firm Twitter.

"The first weeks of Mr. Musk’s Twitter ownership have raised questions about possible violations of securities or other laws, including whether Mr. Musk is funneling Tesla resources into Twitter," Sen. Elizabeth Warren, a Democrat from Massachusetts, wrote to Tesla's board chairman, Robyn Denholm, in a letter dated Sunday.

Warren, a frequent critic of alleged corporate misdeeds, cautioned that an improper diversion of resources might impact Tesla’s sales and earnings, and could result in delays in programs at Tesla.

She noted that Musk loaded Tesla with a debt of $13 billion since announcing his intention to purchase Twitter in April, and has caused it to pay more than $1 billion annually in interest alone – more than the company’s cash flow in 2021.

"I have a series of questions about how the Tesla Board is dealing with conflicts of interest, misappropriation of corporate assets, and other actions by Mr. Musk that appear not to be in the best interests of Tesla and its shareholders, so that I can assess whether current law is adequate in circumstances such as these," she wrote.

Musk last week sold Tesla shares worth $3.58 billion, after unloading $5 billion worth of his shares in just two days in November, after he bought he Twitter for $44 billion in late October, according to financial filings to the US Securities and Exchange Commission (SEC).

While the stock price of Tesla, a public company, has fallen around 30% since Musk bought Twitter on Oct. 27, the billionaire has been making swift and controversial changes for the social media company, from ending remote work for staff to cutting half of its workforce.

Warren stressed in her letter that Musk pulled more than 50 of his trusted Tesla employees, mostly software engineers, from the carmaker into Twitter staff.

"This use of Tesla employees raises obvious questions about whether Mr. Musk is appropriating resources from a publicly traded firm, Tesla, to benefit his own private company, Twitter," she noted.

Separately on Monday, an online poll posted by Musk found over 57% of respondents want him to give up the helm of the social media giant. When announcing the poll, Musk had pledged to abide by its results.