Eastman Kodak Company (NYSE: KODK) faces an investigation by the United States International Development Finance Corp, the federal agency that planned to grant it a $ 765 million loan to manufacture drug ingredients, The Wall Street Journal reported On Monday.
What happened: The agency’s inspector general, responsible for providing loans to businesses affected by the COVID-19 pandemic, told Senator Elizabeth Warren (D-Calif.) Last Thursday that he intends to review the agreement to ready, a spokesperson for Warren told the Journal.
The spokesperson said the Inspector General was investigating why the Rochester, New York-based company was selected for the loan and “whether the Trump administration officials involved in the award had any conflicts over interests and impact of Kodak’s lobbying efforts “.
Warren said he was happy with the Inspector General’s investigations into “this massive fiasco of an agreement.”
Why is this important: Administration officials hailed the July loan deal with President Donald Trump calling it “one of the most important deals in the history of the US pharmaceutical industry,” the Journal noted.
The Kodak deal is said to have helped reduce the United States’ dependence on China and India for the production of drugs and also helped speed up their manufacture.
The United States Securities and Exchange Commission is also reviewing the disclosure of the loan agreement, made on July 27, which caused the company’s shares peak 25% during the day.
The DFC suspended the process last month, while Kodak said it would conduct an internal investigation to examine the deal.
Price action: Kodak shares closed 1.4% higher at $ 6.50 on Monday.
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