SpaceX is secretly attracting Chinese investment
Chinese investors used offshore to purchase shares in Elon Musk's company.
Chinese investors used offshore to purchase shares in Elon Musk's company.
This is indicated by an investigation by the non-profit public organization ProPublica, according to court documents, which include SpaceX's CFO and main investor Iqbaljit Kalon.
In December, Kahlon testified that SpaceX does not want to deal with investors from China because of its status as a U.S. defense contractor. However, he said there is one important exception: SpaceX considers it “acceptable” for Chinese investors to buy the company’s stock through offshore companies.
“The basic mechanism is that these investors come through intermediary structures. They usually set up structures in the British Virgin Islands, the Cayman Islands, Hong Kong and others,” added Kahlon. Offshore structures are often used to maintain the anonymity of investors.
ProPublica experts called SpaceX's approach unusual, saying they were concerned about the possibility that the defense contractor would take active steps to conceal foreign ownership.
Kahlon, who has long been close to the company's management, has said he owns billions of dollars in SpaceX stock. His investment firm also acts as an intermediary, funneling money from investors to buy SpaceX shares. According to court documents, he repeatedly funneled money from China through the Caribbean to buy SpaceX shares.
The US government accuses China of systematically using even minority investments to gain leverage over companies in sensitive industries and to gain privileged access to information about advanced technologies. US regulators view even private investors in China as potential agents of the country's government.
Musk’s business interests in China extend far beyond SpaceX’s ownership structure. In 2022, after Tesla opened a showroom in a Chinese region where the government runs camps for internment of Uyghurs, then-Senator Marco Rubio tweeted, “Stateless corporations are helping the Chinese Communist Party cover up genocide.” Interestingly, Rubio and Musk now serve in the Trump administration.
In recent years, the billionaire has been sympathetic to China's desire to reclaim Taiwan and lavishly praised the government. He made similar statements about the status of Crimea in 2022, when the Russian oligarch owned a 1% stake in SpaceX.
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