Richard Branson, 71, is sued after 'deliberately sending faulty rockets to space', lawsuit claims

Sir Richard Branson knowingly sent defective passenger rockets into space, a lawsuit by Virgin Galactic shareholders claims.

The 71-year-old is accused of concealing his spaceships’ problems and selling off £346 million worth of company shares while the stock price was ‘artificially inflated’.

It is claimed in legal documents that the prototype designs for Virgin Galactic’s Unity spacecraft and the Eve mothership used to launch it into space were ‘severely flawed’ and nowhere near flightworthy.

‘In fact, the prototypes were not meant to be taken into the air,’ the documents claim. ‘Rather, they were meant to provide a starting design point for the company to create its own commercial-grade vehicle that was safe and flightworthy – two things Eve and Unity certainly were not.’

Sir Richard Branson knowingly sent defective passenger rockets into space, a lawsuit by Virgin Galactic shareholders claims

The lawsuit also alleges the spacecraft ‘were not designed for commercial purposes… had cracks develop after every flight, and lacked appropriately scheduled maintenance’.

Shockingly, it claims Branson’s celebrated Virgin Galactic launch into space in July last year suffered damage mid-flight, and ‘cracks were found in key locations on the vehicles’.

It also accuses the company of a cover-up when VSS Unity was severely damaged during a test flight in February 2019.

And it claims ‘the entire crew was almost killed due to a mechanical issue caused by human error, but this went undisclosed at the time’. A mid-flight disaster in October 2014 destroyed the company’s first spaceship, VSS Enterprise, killing its co-pilot and severely injuring the pilot.

The lawsuit also alleges the spacecraft ‘were not designed for commercial purposes… had cracks develop after every flight, and lacked appropriately scheduled maintenance’

Branson’s company went public in October 2019, but court documents claim: ‘Virgin Galactic was less valuable than it appeared because its flights were not as safe as publicly represented.’

The billionaire sold 16 million shares for about £346 million while the stock was ‘artificially inflated’ between April 12 and August 12 last year, the suit alleges.

He has sold off more than $1 billion of Virgin Galactic shares – around £760 million – since early 2020.

Branson founded Virgin Galactic in 2004, hoping to begin commercial space tourism by 2009. Test flights continue, and the launch of commercial space flights for paying customers has been delayed until at least the end of the year.

The company is also investigating materials in spacecraft joints which tests revealed exhibited a ‘reduction in strength’, the suit claims.

Some 600 would-be passengers have paid deposits for flights on Branson’s spacecraft, priced at £340,000 per seat for a flight that lasts up to three hours, including a handful of weightless minutes in zero gravity.

Branson founded Virgin Galactic in 2004, hoping to begin commercial space tourism by 2009. Test flights continue, and the launch of commercial space flights for paying customers has been delayed until at least the end of the year. Pictured: Virgin Galactic’s passenger rocket plane VSS Unity

The investor lawsuit has been filed on behalf of Virgin Galactic shareholders by Thomas Spiteri in the US District Court in the Eastern District of New York. It seeks damages from Branson and Virgin Galactic’s directors and management for alleged breach of fiduciary duty, unjust enrichment, gross mismanagement, abuse of control, waste of corporate assets, and violations of the Exchange Act.

Court papers claim the company ‘will lose and expend many millions of dollars’ fixing structural and design issues, remedying the FAA’s ‘unsafe flight misconduct’ ruling, and fighting the securities class action suit.

Virgin Galactic declined to comment. It has yet to file a defence.