A Tesla shareholder filed a lawsuit on Thursday accusing CEO Elon Musk of insider trading when he sold over $7.5 billion of shares of the electric car maker in late 2022, saying the billionaire entrepreneur sold the shares before potentially disappointing production and delivery numbers were made public.

Shareholder Michael Perry, in the lawsuit filed in Delaware Chancery Court, said that Tesla’s share price plummeted after the company’s fourth-quarter numbers were made public on Jan. 2, 2023, and claimed that Musk “improperly benefited” by about $3 billion in insider profits.

“Musk exploited his position at Tesla, and he breached his fiduciary duties to Tesla,” the lawsuit said, asking the court to direct Musk to return the profits made from the trades.

According to the lawsuit, Musk sold the shares on various dates in November 2022 and December 2022.

The lawsuit also accused Tesla’s directors of breaching their fiduciary duty by allowing Musk to sell the shares.

Musk and Tesla did not immediately respond to a Reuters request for comment.

In the lawsuit, Perry said Musk – who in 2022 said demand for Tesla’s vehicles was “excellent” – found out about the lower-than-expected numbers mid-November, with his access to real-time data, and sold his shares before the information was public.

Following news of vehicle price discounts that sparked demand concerns and the release of the numbers in January, Tesla’s stock tanked.

“Had (Musk) waited to make these sales until after the release of material adverse news,… his sales would have netted him less than 55% of the amounts realized from his November and December 2022 sales,” the lawsuit said.

The lawsuit is the latest legal headache for Musk.

It comes as Musk faces opposition from some Tesla shareholders who are set to vote on June 13 on whether to ratify his $56 billion pay package, which a Delaware judge voided in January because she found he improperly controlled the process.

Tesla is incorporated in Delaware.

Musk is also in the middle of a regulatory probe to determine whether he broke federal securities laws in 2022 when he bought stock in social media platform Twitter, which he later renamed X. Musk said the U.S. Securities and Exchange Commission was trying to “harass” him through unwarranted investigations.

Musk and the top U.S. markets regulator have been in a years-long feud, dating back to 2018, when he tweeted that he had “funding secured” to take Tesla private.

A separate shareholder lawsuit has accused Musk of defrauding X investors by delaying disclosure of his stake in the social media company to amass shares at lower prices.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Prime Minister Narendra Modi meets Tesla and SpaceX CEO Elon Musk, in New York, USA. File.
| Photo Credit: PTI

American electric car maker Tesla CEO Elon Musk is visiting India later this month to meet Prime Minister Narendra Modi and is likely to announce the company’s investment plans in the country, according to sources.

Mr. Musk, who has described as a ‘natural progression’ to provide Tesla electric vehicles in India, is likely to be accompanied by other company executives during the visit that is expected in the week of April 22, a source said.

An e-mail query sent to Tesla to confirm Mr. Musk’s visit remained unanswered.

In June last year, Mr. Musk met with Mr. Modi during the latter’s US visit and stated that he planned to visit India in 2024 while expressing confidence that Tesla would enter the Indian market soon.

His upcoming visit to India comes weeks after the government announced a new electric vehicle policy under which import duty concessions will be given to companies setting up manufacturing units in the country with a minimum investment of USD 500 million, a move aimed at attracting major global players like Tesla.

As per the policy, the companies that would set up manufacturing facilities for EV passenger cars will be allowed to import a limited number of cars at lower customs /import duty of 15 per cent on vehicles costing USD 35,000 and above for a period of five years from the date of issuance of the approval letter by the government.

At present, cars imported as completely built units (CBUs) attract customs duty ranging from 70% to 100%, depending on engine size and cost, insurance and freight (CIF) value less or above $40,000.

The policy seeks to promote India as a manufacturing destination for EVs and attract investment from reputed global EV manufacturers.

Last year, Tesla approached the Indian government seeking duty cuts to import its vehicles in India.

Previously in 2022, Mr. Musk had said that Tesla, which was earlier seeking a reduction in import duties to sell its vehicles in India, would not manufacture its products unless it is allowed to first sell and service its cars in the country.

In August 2021, Mr. Musk said that Tesla may set up a manufacturing unit in India if it first succeeds with imported vehicles in the country. He had said Tesla wanted to launch its vehicles in India “but import duties are the highest in the world by far of any large country!”