Kodak’s share price nearly doubled in early trading on Monday after a government watchdog allegedly cleared the company federal loan agreement to make medicinal ingredients.
Shares of the one-time photography titan climbed around 71% to $ 12.88 as of 7:24 am following a report that the inspector general of the US International Development Finance Corporation found no wrongdoing in how the $ 765 million deal was negotiated.
The agency suspend the loan in August amid scrutiny of how Kodak disclosed the loan, as well as stock market transactions of company directors as the announcement approaches. The concerns have reportedly prompted investigations by the Securities and Exchange Commission and congressional committees.
But Development Finance Corporation Inspector General Anthony Zakel said he had found “no evidence of misconduct on the part of DFC officials” or any sign that agency employees were in any way. conflicts of interest in the agreement, The Wall Street Journal reported Sunday.
Zakel said it was reasonable for DFC to consider loaning Kodak given his experience in supplying materials to the pharmaceutical industry, although his office plans to verify how the agency announces “sensitive transactions.” to market ”with state-owned companies, according to the Journal.
“The track record is very clear and IG’s independent review confirms that DFC followed its standard process, within its standard schedule, led by career finance professionals,” said a DFC spokesperson. the newspaper.
The report came about three months after an internal Kodak investigation business leaders acquitted – including CEO Jim Continenza – of allegations of insider trading stemming from his attempt to pivot into pharmaceuticals.
But it’s not clear whether the DFC will proceed with the loan deal after putting him on the ice about four months ago. Neither the agency nor Kodak immediately responded to emails from The Post requesting comment early Monday morning. The Inspector General’s office also did not immediately respond to a request for comment.
The DFC originally planned to grant Kodak the loan under the Federal Defense Production Act to help the Rochester, New York-based company produce ingredients for a wide range of drugs with the aim of reducing the country’s dependence on foreign drug makers amid the COVID-19 pandemic.
The Kodak share price soared to $ 60 a share in the days following the July 28 announcement, but then fell below $ 10 a share in August after the federal government interrupted the agreement.
Continenza said in October that Kodak would continue its efforts in the pharmaceutical sector whether or not it received federal aid, according to the Journal.