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Elon Musk accuses Twitter of fraud in buyout deal: court filing – AFR

Elon Musk has accused Twitter of fraud, claiming the social media platform misled him about important aspects of his business before agreeing to a $44 billion buyout as their court battle heats up.

The Tesla CEO filed the lawsuit late Thursday as he defends against Twitter’s lawsuit seeking to force him into completing the deal he was trying to cancel.

Musk argued in the Delaware court filing that the number of users the platform can serve ads to is far fewer than the company’s numbers.

“Twitter’s disclosures have slowly unraveled, with Twitter frantically closing the gates on information in a desperate attempt to prevent the Musk parties from exposing their fraud,” the claim reads.

In its own filing, Twitter dismissed the leaping billionaire’s argument, calling it “as implausible and contradictory as it sounds.”

“According to Musk, he — the billionaire founder of several companies, advised by Wall Street bankers and lawyers — was duped by Twitter into signing a $44 billion merger agreement,” Twitter said.

Musk filed his countersuit last week, which was eventually released Thursday, along with a legal defense against Twitter’s claim that the billionaire was contractually obligated to complete the acquisition deal.

– ‘distortion, misrepresentation’ –

“The counterclaims are a story made for litigation that is contradicted by the evidence and common sense,” Twitter argued in the filing.

A five-day trial is scheduled for October 17 to review Twitter’s lawsuit against Musk.

The Tesla CEO courted Twitter’s board of directors with an offer of $54.20 per share, but then announced in July that he was terminating their agreement because the company had accused him of its list of fake and spam accounts in had misled.

Twitter, whose share price closed at $41.06 on Thursday, is sticking to its estimates that less than 5 percent of activity on the platform is due to software “bots” rather than people.

Twitter told the court that Musk’s claim that the false account count exceeded 10 percent was “unsustainable.”

The company also disputed Musk’s claim that he had the right to back out of the deal if Twitter’s bot count was found to be incorrect, since he didn’t ask about bots in his takeover bid.

Twitter accused Musk of fabricating a story to escape a merger agreement that he no longer found attractive.

“Twitter has complied in all respects with the merger agreement,” the company said in the filing filed with Chancery Court in Delaware.

“Musk’s counterclaims, based on distortion, misrepresentation and blatant deception, change nothing.”

The social media platform has urged shareholders to approve the deal and has scheduled a vote on the merger for September 13.

Billions of dollars are at stake, as is the future of Twitter, which Musk says should allow any legal speech – an absolutist position that has raised fears the network could be used to incite violence.

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