Recall that Tesla CEO Elon Musk, during the process of acquiring Twitter, had accused the social media company of committing a material breach by where they lied about the number of bots on the platform, which prompted him to opt out of the $44bn deal.
Not too long after, a former security Chief of Twitter turned whistleblower Peiter Zatko also revealed that Twitter lied to Elon Musk about the number of fake and spam accounts on its platform, which he also revealed some hidden secrets about the company.
Elon Musk also sent an additional letter of deal termination to Twitter Inc (TWTR.N) to include a recent whistleblower complaint from the former security head of the social media firm as another reason to scrap the $44 billion deal
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Following the whistleblower revelation, it was later disclosed by Elon Musk’s lawyer that Twitter had gone behind to pay him $ 7 million to secure his silence.
The payment was mentioned in passing at a Sept. 6 hearing in the lawsuit between Twitter and Elon Musk, over his attempts to cancel a $44 billion purchase of the company.
In the words of Musk’s lawyer at the hearing;
“They’re paying the guy $7 million and making sure he is quiet”.
People familiar with the matter confirmed that the reference was to payment to whistle-blower Peiter Zatko to forever remain silent.
Following this allegation, Twitter representatives however declined to comment about the payment to Zatko, the company’s former head of security.
However, some unidentified people familiar with the matter, disclosed that the payment made by Twitter, was part of a settlement related to Zatko’s lost compensation after leaving Twitter and not to silence him over his recent revelations.
In a recent letter to Twitter, lawyers for Musk stated that Twitter’s failure to seek his consent before paying $7.75 million to whistleblower Peiter Zatko and his lawyers violated the merger agreement, which restricts when Twitter could make such payments.
Twitter lawyers responded on Monday, stating that Musk’s reasoning to back out of the deal was however “invalid and wrongful.”
The company issued a rebuttal on Monday, stating that payments made to the whistleblower did not breach any terms of its $44 billion buyout by Elon Musk after the world’s richest man made another attempt to scrap the deal.
The latest turn of events comes as the two sides head to a five-day trial at the Delaware Court of Chancery set to begin on Oct. 17. Twitter is asking Chancellor Kathaleen McCormick to order Musk to buy it for the agreed $54.20 per share.