By Kanishka Singh
(Reuters) – Eastman Kodak Co’s $ 765 million (£ 587 million) loan agreement with the US government for the manufacture of pharmaceutical ingredients has been suspended due to “recent allegations of misconduct”;, American International Development Finance Corporation (DFC) said.
Earlier this week, senior Democrats’ lawmakers asked federal regulators to investigate securities transactions conducted by the company and its executives over the period. know that companies can get a government loan.
“The recent allegations of misconduct raise serious concerns,” DFC said late Friday in a tweet.
“We will not proceed further unless these allegations are clarified,” DFC said. It mentions an interest letter it signed on July 28 with Kodak.
President Donald Trump on Tuesday said the government would investigate the circumstances surrounding the loan announcement, which would help the photographic equipment maker switch to manufacturing pharmaceuticals at factories in the US.
Kodak shares surged more than 1,000% last week after the loan was announced, giving a headwind for executives, some of whom received selections a day earlier.
Lawmakers said they have “serious concerns” about transactions and asked the Central Securities and Exchange Commission to investigate the circumstances surrounding the matter. They cite a growing concern about insider trading.
The company said it has appointed a special committee of independent directors of the board to conduct internal reviews.
“Internal review will be conducted to the Commission by Akin Gump Strauss Hauer & Feld LLP,” Eastman Kodak said in a statement.
(Reported by Kanishka Singh in Bengaluru; Edited by Sonya Hepinstall)