PALO ALTO -- The journey toward the merger of SolarCity and Tesla has been a long and winding path, especially for the major proponent of this move, Elon Musk, who faced accusations of going under the table to trick shareholders of the real score.

Elon Musk
Elon Musk | Heisenberg Media/Wikimedia Commons

Amidst the controversies and predicted backlash that could stem from the negotiations, the merger between the two companies finally has received the green light. Tesla and SolarCity announced earlier this month that the deal will push through. The shareholders for both companies are scheduled to vote on the matter Nov.17.

Last month, the number of shareholders who filed a lawsuit against the companies has reached seven. In their documents, the petitioners alleged that Musk committed a breach in his fiduciary responsibilities due to his failure to disclose the plan for the merger properly. Some shareholders are seeking an injunction against the upcoming merger, which has a $2.6 billion all-stock transaction at stake. 

“We are concerned that the merger is not being negotiated in the best interests of shareholders, and this lack of transparency deepens those worries,” said Dieter Waizenegger, the executive director of the CtW Investment Group, according to Bloomberg. CtW is the representative of the union-sponsored pension funds that are holding some Tesla shares.

Waizenegger told Bloomberg that Tesla should have disclosed the potential merger before its secondary offering. 

"By not doing so, the company is raising troubling questions that demonstrate why greater accountability and independence is needed at the board level," Waizenegger said.

Prior to the announcement of the merger, the SolarCity bond purchases made by Musk raised eyebrows among experts and analysts. At the time, Stephen Diamond of CtW called the decision a “troubling move.”

“When you see an officer buying stock, it is a good sign — it means the business might have a good future. If you see them buying debt, you wonder, what is the long-term value,” noted Charles Elson, an expert on corporate governance at the University of Delaware, according to CNBC.

In a statement made by Lyndon Rive, he clarified that the move to buy the bonds from SolarCity is deemed to be a “very efficient way” to dole out the necessary funds compared with seeking the help of the banks.

"We invested in SolarCity's solar bonds because it's a very efficient way for the company to raise capital without paying expensive banking fees. The bonds are issued directly online and there are no fees for investors either. That allows SolarCity to offer the bonds at a competitive rate for investors — 6.5 percent for 18-month bonds — and still come in lower than the cost of institutional non-asset financing," explained Rive in a statement shared with CNBC.

Once the merger is finalized, the stockholders of SolarCity will be granted the right to be the recipients of 0.110 of the Tesla common stock shares for every share of the SolarCity common stock issued. The impending merger is anticipated to rake in a number of events to be hosted by both companies yet this year.

On Oct. 17, a product will be revealed by Tesla, but many speculate that this will not be related to any SolarCity project. However, Tesla and SolarCity are expected to have a joint event to present new products on Oct. 28. On Nov. 1, Musk and his team are scheduled to release their financial strategies, as well as other details pertaining to the future of the two companies.

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