Elon Musk cites $7 million whistleblower settlement as another reason to walk away from Twitter purchase


New Delhi: Elon Musk said on Twitter Inc. that it had another reason to back out of its $44 billion acquisition of the social media platform because of a $7 million settlement made to a whistleblower who raised concerns about problems at the business.

Musk claims Twitter misled him and investors about the amount of spam and bot accounts among its more than 230 million users, and is now trying to cancel its acquisition of the social media network. Twitter hits back at Musk’s bot concerns it’s strange to back out of a contract after the world’s richest man allegedly experienced buyer’s remorse.

In a filing Friday, Musk’s lawyers said that, as required by the terms of the acquisition, Twitter had to inform the billionaire before spending $7.75 million on a separation agreement with Peiter Zatko, the former head of security for the company, on June 28. In court filings on Sept. 3, Musk’s lawyers claimed they were told of the Zatko deal. Next week, Zatko will testify before a US Senate committee about his concerns about the platform’s poor security, privacy issues and the large number of bots. He has also been subpoenaed to testify in the Twitter litigation.

The trial in Twitter’s case to force Musk to complete the acquisition is scheduled for October, and both sides are preparing. Judge Kathaleen St. Jude McCormick of the Delaware Court of Chancery on Wednesday granted Musk’s request to include Zatko’s allegations in his counterclaims. But she refused his request to postpone the trial.

An email seeking comment on Twitter was not immediately answered.

This is the third time Musk has informed Twitter executives that he is withdrawing his $54.20 per share offer for the social media network because of violations of the purchase agreement governing the transactions.

“This severance payment violated” the requirement that Twitter executives run the company “in the ordinary course of business” while the legal dispute over Musk’s efforts to torpedo the deal is resolved.

The case is Twitter v. Musk, 22-0613, Delaware Chancery Court (Wilmington).

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