Sections

E-Paper
Home / World News / Eastman Kodak’s $765 million US loan agreement on hold after recent allegations

Eastman Kodak’s $765 million US loan agreement on hold after recent allegations

Earlier this week, senior Democratic lawmakers asked federal regulators to investigate securities transactions made by the company and its executives around the time it learned it could receive the government loan.

Updated: Aug 09, 2020 12:25 IST

By Reuters | Posted by: Shankhyaneel Sarkar, New York

Signage is displayed outside the Eastman Kodak Co. headquarters complex in Rochester, New York, US. (Bloomberg)

Eastman Kodak Co’s $765 million (587 million pounds) loan agreement with the US government to produce pharmaceutical ingredients has been put on hold due to “recent allegations of wrongdoing,” the US International Development Finance Corp (DFC) said.

Earlier this week, senior Democratic lawmakers asked federal regulators to investigate securities transactions made by the company and its executives around the time it learned it could receive the government loan.

“Recent allegations of wrongdoing raise serious concerns,” DFC said late on Friday in a tweet.

“We will not proceed any further unless these allegations are cleared,” the DFC said. It was referring to a letter of interest it signed on July 28 with Kodak.



President Donald Trump on Tuesday said the government would investigate the circumstances surrounding the announcement of the loan, which will help the photographic equipment maker shift into making pharmaceuticals at its US factories.

Kodak shares surged more than 1,000% last week after the loan was announced, generating a windfall for executives, some of whom had received options one day earlier.

Lawmakers said they had “serious concerns” about the transactions and asked the Securities and Exchange Commission to investigate the circumstances surrounding the matter. They cited growing concerns about insider trading.

The company said it had appointed a special committee of independent directors of its board to conduct an internal review.

“The internal review will be conducted for the Committee by Akin Gump Strauss Hauer & Feld LLP,” Eastman Kodak said in a statement.

tags

SCROLL FOR MORE NEWS
This site uses cookies

This site and its partners use technology such as cookies to personalize content and ads and analyse traffic. By using this site you agree to its privacy policy. You can change your mind and revisit your choices at anytime in future.