A business with ties to Chinese military contractors was among the outside investors who acquired stakes in SpaceX while it was still a private company. A group connected to the Qatari royal household even purchased a stake.
The new information comes from a private investor list that ProPublica obtained, which reveals how and by whom people in nations like China have invested in Elon Musk’s jet business. SpaceX built its firm off sensitive U. S. state work like making spy satellites for the Pentagon. Foreign investment in American military companies is highly regulated, despite the fact that there is no prohibition on it.
According to Bloomberg, SpaceX barred investors from buying stock in its initial public offering last week in a show of concern as a “regulatory and compliance threats” and as a sign of its responsiveness to the issues. The U. S. state alleges that China has a method of using investments in sympathetic companies for spy and to get access to cutting-edge systems.
The bank’s most recent IPO, which made Musk the second multibillionaire in the world, was the largest ever. Musk has significant company interests in China, where many of Tesla’s vehicles are produced.
The new information information at least a few investors with addresses in mainland China, Hong Kong or Russia who acquired stakes in SpaceX years ago through a middleman company in the U. S. called Tomales Bay Capital. The investments, which range from$ 800,000 to$ 40 million, were made between 2018 and 2021.
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David Su, the co-founder of the renowned Beijing venture capital firm MPCi, made one purchase in a business. According to the buyer list, the Su group made$ 15 million investments in a SpaceX fund in 2020. It was not Su’s even venture into the space industry, his firm has been a high-profile supporter of some of SpaceX’s Chinese rivals. The U.S. state issued sanctions against two satellite companies Su’s company had invested in because they allegedly worked with the famous Russian mercenary group, the Wagner Group. One of the businesses was once more fined next month for allegedly aiding Iran in attacking American military forces during the conflict.
MPCi has even worked with Taiwanese authorities investment funds. Su’s company was named a partner in a state-backed effort to develop China’s aviation sector last year, according to the site for the country’s Ministry of Science and Technology.
Su has not provided any evidence that she did something inappropriate. But the important question from the U. S. government’s view would be whether China-based investors got access to nonpublic information about SpaceX’s systems or strategies, said Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department scrutinizing foreign investments. If an investor has interests conflicts with other Chinese companies and they wish to pass that information on to rivals, she said, it might be a problem for national security.
Su “has not received any nonpublic information of SpaceX,” according to MPCi in a statement. The statement described Su as” a Singapore citizen who resides in Singapore”, adding:” MPCi is a brand name with different teams and funds. Mr. Su is in charge of the US dollar funds. Su” spent almost 100 % of his time in China over the past 20 years,” according to a profile from 2024.
A lawyer for Tomales Bay Capital said in a statement that the firm “has not provided any non-public, sensitive information regarding SpaceX to investors”. The investors are passive limited partners, he claimed, adding that Tomales Bay’s investors have not been given any additional information about SpaceX besides fund financials that include quarterly valuations.
The lawyer, Ryan Stonerock, claimed that the majority of the investors on the unsealed Tomales Bay investor list are not citizens of any foreign adversaries, including Russia or China, and that none of them are Russian or Chinese agents or any other foreign adversaries. He added that some of the investors “may have mailing addresses listed” in Russia or China but do not actually live there” and are in fact citizens and residents of the United States or other countries that are not foreign adversaries”.
SpaceX did not respond to inquiries. Spacety, one of the Chinese space companies that the United States government has sanctioned, has previously denied supporting the Wagner Group.
All the investors located in China or Russia that ProPublica identified appeared to be either wealthy businesspeople or their children.
The new documents are the result of a Tomales Bay Capital corporation dispute in Delaware. With the assistance of attorneys from the Reporters Committee for Freedom of the Press and Shaw Keller, ProPublica made the court records public this month. Tomales Bay Capital appealed to the Delaware Supreme Court, which ruled in favor of ProPublica.
Iqbaljit Kahlon, a shareholder in Tomales Bay Capital, has long been associated with SpaceX’s leadership and even been a part of the company’s operations. Bret Johnsen, a CFO for SpaceX and a 15-year employee, claimed Kahlon “has been with the company in one form or fashion longer than I have.”
Before SpaceX went public, Kahlon made a fortune by acting as a middleman for investors hoping to add the rocket company to their portfolio. His company frequently purchases SpaceX stock, packages it into investment funds, and charges fees to investors who purchase additional shares of those funds.
According to the meeting minutes, which later appeared in court records, Kahlon promised special access to SpaceX, including quarterly updates on the company’s business development, “visits to SpaceX, and the opportunities interview with Space X’s CFO,” in a 2021 pitch to one potential investor in China.
While ProPublica and other outlets have previously reported on the existence of Chinese investors in SpaceX, the identities of most of the rocket company’s investors have been closely guarded. The Kahlon investor list raises the number of names in the eyes of the general public regarding SpaceX ownership. The list includes investments in several Tomales Bay Capital funds that have reportedly acquired SpaceX stock. It is possible that some of the funds also have stakes in other businesses.
Some of the SpaceX investors on Kahlon’s ledger are easy to identify: the Indian politician Abhishek Singhvi, Betsy DeVos, the former U. S. secretary of education, a British Virgin Islands company owned by Indonesian billionaires. Other companies on the list, whose ultimate owners are unknown, are shell companies, though.
A Delaware LLC, HAL9001 Partners Fund I, one of these companies, invested about$ 10 million in a SpaceX fund in 2020. The incorporation documents for HAL9001 were signed by the venture capitalist Roman Sobachevskiy. For managing a different investment on behalf of a sanctioned Russian oligarch, the Treasury Department recently issued a fine of hundreds of millions of dollars. Sobachevskiy has not been publicly charged with any wrongdoing.
A Tomales Bay Capital spokesperson said that the oligarch “had no involvement with the investment”. Sobachevskiy did not respond to inquiries about who contributed the funds to the SpaceX investment.
The connections between SpaceX and Qatar are also made clear by the records. Funds affiliated with Bracket Capital— an investment firm with offices in Los Angeles, London and Qatar — invested about$ 48 million through a series of deals from 2017 through 2020, the documents show. According to an email Kahlon sent to SpaceX’s CFO, Bracket has money from the Qatari royal family. Additionally, the ledger lists Doha, Qatar as the home of a mysterious business called AM FIG Cayman Limited, which made an investment of around$ 10 million in 2020.
The documents do not specify whether the Bracket investments were made on behalf of the royal family or some other client. In 2021, Kahlon texted a Bracket employee to ask them to fundraise for yet another SpaceX deal,” At the end we can just send Yalda to talk to big guy. We require a bail out, lol. ( Yalda Aoukar is Bracket’s co-founder. What Kahlon meant by” a bail out” and how the “big guy” refers to a member of the royal family is unclear.
Bracket did not respond to comments on the website.
The investments covered in the ledger were tiny percentages of SpaceX but would have generated windfalls. The valuation of the business has increased significantly over the past few years, rising from$ 33.3 billion in 2019 to$ 2.7 trillion as of Wednesday morning.
ProPublica covered SpaceX’s unusual strategy for accepting money from Chinese investors in the past year. According to testimony from the Delaware case, the company allowed Chinese investors to buy stakes in SpaceX so long as the money was routed through the Cayman Islands or other offshore secrecy hubs.
ProPublica first reported on Before the SpaceX IPO: Investors in China Secretly Acquired Stakes.
