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Twitter: Elon Musk facing probe over $44bn acquisition deal

Twitter has said the world’s richest person, Elon Musk, is being investigated by federal authorities over his conduct in his $44 billion takeover deal for the microblogging site.

The social media company said this in a court filing released on Thursday.

While the filing said he was under investigations, it did not say what the exact focus of the probes was and which federal authorities are conducting them.

Twitter, which sued Musk in July to force him to close the deal, said attorneys for the Tesla CEO had claimed “investigative privilege” when refusing to hand over documents it had sought.

In late September, Musk’s attorneys had provided a “privilege log” identifying documents to be withheld, Twitter said.

According to Reuters, the log referenced drafts of a May 13 email to the U.S. Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).

“This game of ‘hide the ball’ must end,” the company said in the court filing.

READ ALSO: Elon Musk makes U-turn, ready to buy Twitter for $44bn

The court filing, which asked Delaware judge Kathaleen McCormick to order Musk’s attorneys to provide the documents, was made on October 6 – the same day that McCormick paused litigation between the two sides after Musk reversed course and said he would proceed with the deal.

Alex Spiro, an attorney for Musk, said Twitter’s court filing was a “misdirection” and asserted: “It is Twitter’s executives that are under federal investigation.”

Twitter declined to comment on Spiro’s statement. It also declined comment when asked about its understanding of any investigation into Musk.

The SEC did not immediately respond to a request for comment and the FTC declined to comment.

The SEC has questioned Musk’s comments about the Twitter acquisition, including whether a 9% stake he had built up before announcing his bid had been disclosed late and why it indicated that he intended to be a passive shareholder. Musk later refiled the disclosure to indicate he was an active investor.

In June, the SEC asked Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.

The Information, a tech news site, reported in April that the FTC was scrutinizing whether Musk failed to comply with the antitrust reporting requirement relating to an investor’s intentions of being a passive or active shareholder.

Twitter said in June, however, that the takeover deal with Musk had cleared an antitrust waiting period for review by the FTC and U.S. Justice Department.

McCormick has given Musk until October 28 to close the acquisition. If the deal does not get done by then, a trial date will be set for November.

The Star

Segun Ojo

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