The U.S. government blocked a $765 million loan to Eastman Kodak, who was planning to use the loan to make drug ingredients for use in possible COVID-19 vaccines, because of “alleged wrongdoing” by executives.
In late July, Kodak was granted a $765 million manufacturing contract geared towards making generic drug APIs by the U.S. International Development Finance Corporation (DFC), as part of the White House’s broader efforts to reshore manufacturing. Granted under the Defense Production Act, the first-of-its-kind loan is aimed at lowering America’s reliance on API imports from countries such as India and China.
But before the DFC could grant the loan, lawmakers asked federal regulators to investigate securities transactions made by the company and its executives around the time it learned it could receive the government loan.
“Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared,” the U.S. International Development Finance Corporation said in a tweet Friday.
Shares of Eastman Kodak plunged more than 40 percent today after the federal agency said it was reviewing the allegations.
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