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Kodak’s share donation raises new concerns about company’s government loan



On July 29, the peak of Kodak’s recent 2.757% share increase, a member of the company’s board of directors, George Karfunkel, and his wife donated 3 million shares of Kodak shares – valued at more than $ 100 million in that time – for a synagogue called Congregation Chemdas Yisroel Inc., according to a securities register. The Synagogue is registered as a charity in New York State.

The donation, which could potentially be claimed as a tax deduction, came amid heavy trading in Kodak shares that was prompted by news that the company would receive a $ 765 million loan from the US government to help make the components of medication.

The timing of the announcement and the issuance of certain executive stock options have triggered a federal check. House Democrats demanded documents and information on the issue from Kodak, according to a letter sent last week.
The newspaper and Mother Jones first reported Karfunkel donation.
Kodak said in a securities statement on Friday that an internal review made by an outside law firm would consider possible credit-related activity. The company said a special committee of independent directors would oversee the internal review.

A spokesman for Kodak told CNN that the donation from Karfunkels is “within the scope”

; of this review. Karfunkels could not be reached for comment.

The Kodak website describes George Karfunkel as an expert in financial planning and investment strategy who has served on the company’s board of directors since 2013.

On the day of his and his wife’s donation, Kodak shares reached a low price of $ 17.50 per share and a high $ 60, meaning the donation could be worth more than $ 100 million .

On Friday, the post-loan agency said the deal would be put on hold. “Recent allegations of wrongdoing raise serious concerns,” tweeted the US International Development Finance Corporation. “We will not proceed further unless these allegations are clarified.”
On Monday, Kodak stock was temporarily suspended after diving as much as 43% earlier in the day.

Laurie Styron, chief executive of the nonprofit CharityWatch, described the situation involving the Karfunkel donation as disturbing. His position on the Kodak board may have given him “special insights that allowed him to predict possible fluctuations in Kodak stock price,” she said.

She also said that many charities and religious organizations that offer tax breaks have checks to prevent the occurrence of inadequacy.

“With Karfunkel having a firm foothold in Kodak and in the religious organization receiving the share donation, it is unclear whether there was sufficient board independence for this donation to be properly verified and approved at arm’s length. “to be accepted,” Styron said.

New York charity collections from 2019 describe the Chemdas Yisroel Congregation as a Jewish Orthodox synagogue that uses funds exclusively for religious, charitable, and educational purposes. The documents list George Karfunkel as the President of the congregation.

Representatives for the Chemdas Yisroel Congregation could not be reached for comment.




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