Elizabeth Warren sent a letter to Tesla’s board of directors accusing Elon Musk of “inevitable conflicts” after his Twitter takeover

Warren has expressed concern about how Tesla’s board of directors is treating Musk since he became CEO of Twitter, claiming that his actions may not be in the “best interests” of Tesla and its shareholders. It is the board’s “legal responsibility” to address the situation, she said.

“That responsibility includes ensuring that Mr. Musk is an effective CEO and that he meets his legal obligation to act in the best interests of Tesla and all of its shareholders, not just himself,” she wrote in a letter to Tesla Chairwoman Robyn Denholm. On Sunday.

In the early weeks of his Twitter acquisition, Musk’s leadership has raised concerns about whether he is “channeling Tesla resources into Twitter,” Warren wrote, citing reports claiming Musk deployed Tesla software engineers to Twitter.

It raises questions as to whether Mr. Musk is “appropriated resources from a public company, Tesla, to benefit his own private company, Twitter,” Warren wrote. This would “violate” Musk’s legal duty to Tesla and raise questions about the board’s competency, she said.

Warren mentioned an anonymous contributor who told CNBC that turning Musk down without facing consequences later is almost impossible. That raises a bigger question about whether employees were being coerced into working for Twitter rather than invited to do so, Warren said.

Since Musk’s acquisition of Twitter, several advertisers have pulled their ads from Twitter, resulting in a drop in revenue. Warren said that “Twitter’s desperation for revenue to cover its new debt could also create conflict.”

Musk could “shift Twitter algorithms in such a way that praise for Tesla products receives more attention and criticism of Tesla products is suppressed”. It could also let Tesla provide free ads from Twitter, or it could charge Tesla excessive fees for advertising. Anyway, Warren says it’s a conflict of interest.

Musk and Tesla are “inextricably linked,” Warren said, meaning his actions as Twitter’s CEO and the way Twitter is operated and perceived could hurt the Tesla brand.

This year, Tesla shares have fallen more than 62%, in part due to growing investor concerns about Musk’s purchase of Twitter and his focus on that company at Tesla’s expense.

“Tesla’s losses didn’t come from a vacuum: While not all of the losses can be attributed to Mr. Musk’s decision to take over Twitter, there seems to be a direct link, as one analyst dubbed the Twitter deal an ‘albatross’ who hangs over Tesla,” Warren wrote.

She also added a dozen questions to the board about informal or formal agreements between Tesla and Twitter. In addition, she asked about safeguards the board has put in place to avoid conflicts of interest with Musk and whether it has reviewed Musk’s actions related to the two companies.

“Despite widespread concerns about Mr Musk’s takeover of Twitter while he was Tesla’s CEO, it remains unclear whether the Tesla board – which holds the key decision-making powers within the company – adequately directs the company or is clear established rules and guidelines to address the risks posed by Mr Musk’s dual role to Tesla,” Warren wrote.

Musk, Tesla and Twitter did not immediately respond assets Request for comments.

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