The stock was temporarily suspended as it plunged as much as 43% at the beginning of the day.
“Recent allegations of wrongdoing raise serious concerns,” the U.S. International Finance and Development Corporation said in a message Friday afternoon. “We will not proceed further unless these allegations are clarified.”
The DFC announcement came days after questions were raised about the volume of heavy trading on Kodak shares, which rose to 2.757% after the initial announcement on July 29th.
Kodak executives including CEO Jim Continenza are also under criticism for taking stock options on July 27, a day before the loan announcement.
Last week the Wall Street Journal reported that the Insurance and Exchanges Commission is investigating why Kodak announced the loan a day before the official announcement, which sent shares 25% higher. The newspaper said a local television station at Kodak̵
7;s home in Rochester, New York, published a media tip regarding the forthcoming announcement, adding that the station had not been given an embargo on the news.
The $ 765 million loan was intended to launch Kodak Pharmaceuticals, which will produce active pharmaceutical ingredients to reduce America’s dependence on foreign drug manufacturers. The company will employ about 350 workers, most in New York State, and create about 1,200 indirect jobs.
Kodak did not immediately respond to a request for comment.