An Eastman Kodak board member donated $116m in company shares to an Orthodox Jewish congregation just before their price collapsed, raising new questions about how company insiders benefited from a controversial US government loan.
George Karfunkel, a Kodak director, and his wife, Renee, donated 3m shares to Chemdas Yisroel, on July 29, according to a Kodak filing with the Securities and Exchange Commission.
The shares had spiked more than 1,000 per cent after a US government agency announced it was granting Kodak a $765m loan to begin producing pharmaceutical ingredients to treat Covid patients. Shares peaked at $60 on the day the transfer was made, but averaged nearly $39 that day.
The government’s development finance corporation has since said it would delay the loan as questions have swirled about its propriety. Democrats in Congress have called for an investigation, noting that Kodak does not have any experience in the pharmaceuticals business, and raising questions about improper trading by executives ahead of the news.
Kodak shares have since collapsed from last month’s highs to $10.43, as of Tuesday afternoon. Kodak’s disclosure of the charitable transaction was first reported by the Wall Street Journal.
Chemdas Yisroel is a Brooklyn congregation that was founded in December 2018, according to government filings. Mr Karfunkel is listed as its president. Its mailing address is that of a Brooklyn accounting firm, Roth & Co.
A person at the accounting firm said they were not permitted to discuss matters involving a separate entity.
Mr Karfunkel and his late brother, Michael, came to the US from Hungary in the 1950s, according to the Jewish Forward newspaper, and built a multibillion-dollar fortune handling paperwork for stock listings. They later branched into insurance.
Mr Karfunkel was a survivor of the 1976 raid on Entebbe, after a passenger jet was hijacked by Palestinian terrorists targeting Jews.