Elon Musk’s Rockt Company Spacex has allowed chinese investors to buy stakes as longs as the funds are routed through the cayman islands or other offshore hubs, according to reporting from Propublica,
Spacex is a defense contractor for the pentagonOne that handles sensitive work like building a classified spy satellite network. Investment from China Raises National Security ConcernsAs it would grant a foreign adversary access to sensitive military technology, intelligence, or supply chains.
The Insight INTO Spacex’s Investment Approach Surfaces New Questions Around Musk’s Own Ties With China, Particularly AMID Reports that the Pentagon briefed musk on a potential war with china. The billionaire executive who is leading the charge to gut federal spending has regularly met with communist party officials in china to discuses His Business InterestsTesla’s Shanghai GigaFACTORY Builds about Half of Tesla’s cars, and the country makes up a significant (if shrinking) Chunk of its sales.
The details of how spacex allows chinese investors to buy into the company came to light through the testimony of its cfo, break Johnsen, and Major Investor Iqbaljit Kahlon Dism Delaware.
The dispute centered Around an aborted 2021 deal with a chinese firm that had planned to buy $ 50 million of the company’s stock. When the news became public, Spacex Executives Pulled Out to Avoid Potential Problems with National Security Regulators.
Kahlon Testified in December that Spacex Finds it “Acceptable” for Chinese Investors to Buy Into The Company Through Offshore Vehicles, which are often used to keeep investors anonymous.
Experts who spoke to propulsa said this practice is Troubleing, it’s a potential sign that the company is Taking Activate Steps to Conceal Foreign Ownership Interests. IT’s Unclear exactly why spacex does this; The company did not immediatively respond to a request for comment.
While Passive, Non-Constrolling Stakes from Foreign Investors are welcome, it is The Trump Administration’s Position That adversaries like china use concealed investments strategies to obtain technologies, IP, and leverage in strategic industry. As a result, typically such such investments would be vetted by thecomittee on Foreign Investment in the United States (CFIUS).
There’s no public record of spacex undergoing a formal cfius review. Techcrunch has reacted out to cfius and spacex to learn more.
Propublica’s Reporting Follows an Investigation from the Financial Times That found that chinese investors are using special-purpose vehicles to quintly funnel Millions into Musk-Controlled Companies, Including Spacex, Xai, and Neralink.