SpaceX Took Money Directly From Chinese Investors: Company Insider — ProPublica

According to previously sealed testimony, Elon Musk SpaceX took money directly from Chinese investors, raising new issues about foreign property interests in one of the most important US military contractors.

The latest indications coming from SpaceX insider during the court case for the first time direct direct Chinese investments into a private company. Although US military contractors do not have a ban on Chinese property, such investments are strongly regulated and this issue is considered US government as a significant problem of national security.

“They are obviously deposition Last year, he added that some “directly on the cap”. The CAP table refers to the capitalization table of the company that lists its shareholders.

The column’s testimonies do not reveal Chinese investments in SpaceX or investor identity. Kahlon has been near the company’s management and manages its own firm, which acts as a mediator for wealthy investors seeking to purchase SpaceX shares.

SpaceX retains its complete ownership structure. It was previously reported What some Chinese investors bought indirect rates in SpaceX, invested in Middleman, which in turn owned stocks in the missile company. New readings describe direct investments that suggest closer connection with SpaceX.

SpaceX blooms when it delays the sensitive US government’s contracts: from creating spy satellites to the Pentagon to launch a NASA spacecraft. The US and White House embassies are also related to Starlink’s service. Musk Approximately 42% The company’s share is estimated at $ 168 billion. If he had nothing else, he would be one of the 10 richest people in the world.

National Security Law experts have stated that federal officials will probably be deeply interested in understanding direct Chinese investments in SpaceX. Whether there were reasons for concern will depend on the details, they said, but the US government claimed that China has a systematic strategy for using investments in sensitive industries.

When investors have access to non -state information about the company – say, details about their contracts or supply chain – it can be useful for Chinese intelligence, said Sarah Bauer Danzman, a professor at Indiana, who worked in the State Department, studying foreign investments. This “would create huge risks that, if implemented, will have great consequences for national security,” she said.

SpaceX did not answer questions on this story. Kahlon refused to comment.

The new court records come from court proceedings in Delaware between the column and other investor. The testimonies were sealed while PROPBLICA, with the participation of the lawyers, moved Keller in the spring to make it publicly available. SpaceX struggled with these efforts, but the judge ruled that some records should be published. This week’s testimony of the column.

Buying stocks at SpaceX is much more difficult than buying a traded company like Tesla or Microsoft. SpaceX has control over who can buy it, and investors are entering different categories. The most sparse group is direct investors who actually own SpaceX stocks. This group includes funds led with personal ties with Musk. Then there are indirect investors who effectively buy rates in SpaceX through the intermediary like Kahlon. (The indirect investors actually buy to the Mediator’s Fund, usually paying a big fee.) All previously known Chinese investors in SpaceX got into the last category.

This year, Propublica reports further An unusual feature of SpaceX’s approach to investment from China. According to the testimony of the Delaware case, the company allows Chinese investors to buy rates in SpaceX as long as the money is sent via Cayman Islands or other offshore hubs. Companies should only actively report Chinese investments in government under limited circumstances and no rules as too much.

After the PROPUBLICA report, Democrats at home sent a letter Defense Minister Pete Hegset has been alarming about the “potential aggravation of the company”. “In the light of the extraordinary sensitivity of SpaceX’s work for DOD and NASA, this lack of transparency raises serious questions,” they wrote. It is unclear whether it is accepted by any action.

Kahlon has turned his access to SpaceX’s stock into a profitable business. His investor list is read as the Atlas of the World. Investor names are edited in a recently unlocked document, but their addresses go from Chile to Malaysia. One is in Russia. At least two are in mainland China. One is in Qatar. (In one e-mail, SpaceX Chief Financial Director Kahlon stated that there is money in the royal family of Qatar and already invested in SpaceX in the Los Angeles Fund.)

“You have done a large number,” wrote China a financier column four years ago. “Lol something like this. SpaceX was a gift that continues to give,” the columns replied. “Thank you all.”

Kahlon first met with SpaceX when he was a young startup, according to court records. The financial director of SpaceX, Brett Jonesen, who was there 14 years old, testified that Kahlon “was in the company in one form or fashion longer than mine.” Johnsen also testified that SpaceX has no official policy regarding the adoption of investments from the US government. But he said he was asking the fund heads to “stay away from Russian, Chinese, Iranian, North Korean property,” because it could make “more difficult to win government contracts.”

There are signs that by 2021 Kahlon was cautious about the funds from China. The US government is increasingly concerned about Chinese investments in technology companies, and in June, Kahlon told the partner that “picky” with whom he allowed to acquire in the new ability of SpaceX. “Only the people I want to have a long -term relationship. None of the mainland China,” the columns said.

But when he was racing to collect investors’ pool, these problems seemed to disappear. By November 2021, Kahlon personally raised money from China to buy space rates. He said a company based in Shanghai that if she is invested with it, she will receive quarterly SpaceX business development updates, “visiting SpaceX and interviewing with the Space X CEO,” the court records.

Shanghai’s company ended up Kahlon’s $ 50 million to invest in a Moscow business according to the court record. Space Was the transaction canceled after the plan became public.