The U.S. International Development Finance Corporation (DFC) says its deal with Eastman Kodak is on hold.
On July 28, DFC signed a letter of intent with Kodak as part of a federal initiative to shift production of generic prescription drugs to the U.S.
A $765 million federal loan through the DFC could be given to Kodak to produce pharmaceutical products in Rochester and at the company’s facility in St. Paul, Minnesota.
However, activity by Kodak and related parties prior to the announcement led to scrutiny and calls for an investigation into the possibility of insider trading.
On Friday, the DFC released a statement on Twitter saying the recent allegations raise serious concerns.
“We will not proceed any further unless these allegations are cleared,” the statement read in part.
A spokesperson for Kodak declined to comment on the news that the deal is on hold.
Peter Navarro, director of the Office of Trade and Manufacturing Policy, tweeted that he is very disappointed that last week’s deal with Kodak was tarnished by allegations.
Kodak announced on Friday that it will appoint a special committee to conduct an internal review of the process surrounding the company’s agreement.