The entry of foreign investors to fund Elon Musk’s purchase of Twitter could face the same kind of regulatory scrutiny over national security that TikTok faced in the United States, legal experts said.
Musk disclosed the day before that Saudi Arabia’s Prince Alwaleed bin Talal, Qatar’s sovereign wealth fund and cryptocurrency exchange Binance make up the investors that will help fund his $44 billion acquisition of Twitter.
That could give the Committee on Foreign Investment in the United States (CFIUS) room to examine the deal for potential national security risks, said six regulatory lawyers not involved in the transaction and heard by Reuters.
“To the extent that Musk’s proposed acquisition of Twitter includes foreign investment, it could very well fall under the jurisdiction of CFIUS,” said Chris Griner, chairman of the national security practice at Stroock & Lavan.
A spokesperson for the US Treasury Department, which chairs CFIUS, declined to comment. Spokespeople for Musk, bin Talal, Qatar and Binance did not immediately respond to requests for comment.
Former President Donald Trump’s administration turned to CFIUS in 2020 in an attempt to force Chinese TikTok owner ByteDance to sell the video app. His successor, Joe Biden, abandoned that effort after ByteDance agreed to change the way US user data is stored.
Lawyers interviewed by Reuters said the risk of CFIUS blocking Musk’s deal is small because he will control Twitter and foreign investors are acquiring relatively small stakes. They added that this could change if Musk gives influence to the company to foreign investors, such as sitting on the board of directors.
One area of potential scrutiny for CFIUS, the lawyers said, could be Musk’s dealings with foreign governments hostile to free speech or eager to overtake the United States technologically.
Source: CNN Brasil
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