By Kanishka Singh
(Reuters) – A $ 765 million (7 587 million) loan deal from Eastman Kodak Co. with the US government to produce pharmaceutical ingredients has been put on hold due to “recent allegations of wrongdoing”;, the Finance Development Committee said. US International (DFC).
Earlier this week, senior Democratic lawmakers urged federal regulators to investigate securities transactions made by the company and its executives around the time they learned it could take government credit.
“Recent allegations of wrongdoing raise serious concerns,” the DFC said late Friday in a tweet.
“We will not proceed further if these allegations are not clarified,” the DFC said. She was referring to a letter of interest she signed on July 28 with Kodak.
President Donald Trump on Tuesday said the government will investigate the circumstances surrounding the credit announcement, which will help the photographic equipment maker relocate to making pharmaceuticals at its U.S. factories.
Kodak shares rose more than 1,000% last week after the loan was announced, creating a failure for executives, some of whom had taken options the day before.
Lawmakers said they had “serious concerns” about the transactions and asked the Insurance and Exchanges Commission to investigate the circumstances surrounding the matter. They cited growing concerns about domestic trade.
The company said it had appointed a special committee of independent directors to its board to conduct an internal review.
“Internal review will be done for the Committee by Akin Gump Strauss Hauer & Feld LLP,” Eastman Kodak said in a statement.
(Reporting by Kanishka Singh in Bengaluru; Editing by Sonya Hepinstall)