SpaceX has reportedly evacuated employees from Brazil and advised against travel to the country, as Elon Musk faces legal issues with Brazil’s Supreme Court over his social media platform X.
What Happened: In an email last week, SpaceX President Gwynne Shotwell instructed employees to avoid traveling to Brazil for both work and leisure, reported The Wall Street Journal, citing people familiar with the email.
The company also relocated its small group of non-Brazilian employees from the country.
For months, Musk has been in conflict with Brazilian Supreme Court Justice Alexandre de Moraes, who ordered X to remove accounts spreading hate speech and misinformation. In August, X ceased operations in Brazil to protect its staff’s safety.
Last week, the court banned X until it complies with legal requirements, including paying fines and appointing a legal director in Brazil. The court also froze SpaceX’s Starlink finances in Brazil, preventing further financial transactions, according to Starlink.
Foreign investors have reacted negatively. Arthur Lira, leader of Brazil's lower house of Congress, warned that the decision could increase legal uncertainties and deter other businesses.
Musk responded to the report claiming SpaceX’s evacuation of employees, stating, “SpaceX is a separate company and they did even claim that SpaceX/Starlink broke any laws. Purely capricious.”
SpaceX did not immediately respond to Benzinga’s request for comment.
Why It Matters: The legal battle between Musk and Brazil’s Supreme Court has broader implications for Musk’s ventures. On Monday, Musk threatened to seize Brazilian government assets unless property belonging to his companies, X and SpaceX, is returned. He expressed his frustration on social media, stating, “Hope Lula enjoys flying commercial.”
On Tuesday, Wall Street Journal business columnist, Tim Higgins warned that Musk’s standoff with Brazil could potentially impact his other businesses, including Tesla Inc. TSLA.
The expert highlighted that the ongoing dispute could create a ripple effect, affecting investor confidence and operations across Musk’s enterprises.
Additionally, Starlink complied with the Brazilian court’s order to block access to X, reversing its previous stance. The company stated, “We continue to pursue all legal avenues” to address the situation.
Furthermore, the Brazilian government is considering taxing large tech companies to meet its 2025 fiscal goals. This move comes after banning X and freezing Starlink’s finances, indicating a broader regulatory shift that could impact other multinational corporations operating in Brazil.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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