Eastman Kodak shares fell on Monday after a federal agency put its $765 million loan on hold last week.
“Recent allegations of wrongdoing raise serious concerns,” the U.S. International Development Finance Corporation (DFC), an independent U.S. government agency that provides financing for private development projects, announced late Friday on Twitter. “We will not proceed any further unless these allegations are cleared.”
The federal loan was intended to launch Kodak Pharmaceuticals to produce active pharmaceutical ingredients for generic drugs, to help reduce the United States’s reliance on other countries. The deal marked Trump’s 33rd use of the Defense Production Act.
Kodak shares skyrocketed more than 1,100 percent just two days after the deal’s July 28 announcement. It reached a high of $60 a share on July 29.
A statement sent on behalf of Kodak to The Epoch Times on early Tuesday reads, “The Company appreciates and supports the DFC’s decision to await clarification before moving forward with the process.”
“The company does not intend to make further public comment on the committee’s work during the pendency of the review,” Kodak’s statement read.
Sen. Elizabeth Warren (D-Mass.) sent a letter on Aug. 3 asking the U.S. Securities and Exchange Commission (SEC), an independent U.S. government agency that regulates the country’s securities industry, to investigate “potential incidents of insider trading” before July 28.
According to the WSJ report, Kodak reportedly sent a news advisory to news outlets ahead of the official announcement, and did not indicate that news of the $765 million loan deal was not intended to be released until later.
When asked on Aug. 4 to comment on reports that the SEC had opened an investigation into the Kodak deal, Trump said, “We’ll do a little study on that, and we’ll find out ... If there is any problem, we’ll let you know about it very quickly, but I wasn’t involved in it.”
Press Secretary Kayleigh McEnany said on Monday that the administration is “certainly aware of the Kodak allegations and take them seriously.” She noted that the DFC put the deal on hold as soon as the administration became aware of the allegations.
White House trade adviser Peter Navarro commented on the situation on Twitter, writing, “VERY disappointed last week’s great deal with Kodak tarnished by allegations. Absolutely RIGHT move by DFC! We must redouble efforts to bring our pharma manufacturing home!!”