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The Morning Risk Report: Planned $765 Million Loan to Kodak on Ice Amid Probes
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The Trump administration announced about two weeks ago its intent to lend $765 million to Eastman Kodak, the onetime photo leader, to produce drug ingredients. PHOTO: MIKE BRADLEY/BLOOMBERG NEWS
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Good morning. A federal agency has put a planned $765 million loan to Eastman Kodak Co. on hold after the deal came under congressional and regulatory scrutiny.
The U.S. International Development Finance Corp. announced plans last month to loan Kodak the funds to produce drug ingredients at its factories. But in a tweet late last week, the agency said that “recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.”
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Kodak declined to comment on the decision by the agency. Kodak said on Friday it would launch an internal review. The Securities and Exchange Commission is investigating how Kodak controlled disclosure of the loan, word of which began to emerge on July 27, causing Kodak’s stock price to rise 25% that day.
The SEC is also expected to examine the stock options granted to executives on July 27. The option grants instantly became profitable, at least on paper, after Kodak’s loan became public.
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Carrie Lam, Hong Kong's Beijing-appointed chief executive, is among those sanctioned by the U.S. PHOTO: CHAN LONG HEI/BLOOMBERG NEWS
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The U.S. levied sanctions on some of Hong Kong’s leading officials and China’s top enforcers of Beijing’s clampdown on the territory, ratcheting up the Trump administration’s use of sanctions against senior Chinese political figures.
The Treasury Department measures target the territory’s Beijing-appointed chief executive Carrie Lam and several other current and former officials responsible for implementing Beijing’s decision to assert greater control over the former British colony. The moves are likely to exacerbate diplomatic tensions between the world’s two largest economies. By targeting Mrs. Lam and other senior officials, they are a further blow to Hong Kong’s standing as a global financial center.
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About five million small companies across the country rushed to get government-backed loans this spring amid fears the coronavirus pandemic would destroy their business. Now, many are returning the money with interest—including government contractors that could face the loss of new business, or be forced to take a rate cut on future work, if it is determined they didn’t need the money.
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Goldman Sachs Group Inc. restated its second-quarter earnings lower following its $3.9 billion settlement with the government of Malaysia to resolve a long-running investigation into its work for a corrupt investment fund.
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The Environmental Protection Agency is preparing to adopt new rules that would rescind regulations for methane-gas emissions, including ending requirements that oil-and-gas producers have systems and procedures to detect methane leaks in their systems, senior administration officials said.
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TikTok is facing a Trump administration ban. PHOTO: JAKUB PORZYCKI/NURPHOTO/ZUMA PRESS
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Several investment and technology firms are exploring a potential deal for the U.S. operations of TikTok, which is facing a Trump administration ban, but they each would have to surmount hurdles at least as high as the Chinese social-media platform’s main suitor, Microsoft Corp.
Twitter Inc. has had preliminary talks about a potential combination with TikTok in the U.S., The Wall Street Journal has reported.
TikTok’s parent, Beijing-based ByteDance Ltd., has been scrambling to find a way to keep its popular video-sharing service alive in the U.S. after the Trump administration declared the app a national security threat because of its Chinese ownership. Several investment firms with ties to Twitter or ByteDance also could play a role in any transaction involving Twitter or Microsoft, people familiar with the talks say.
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Simon Property Group Inc., the largest mall owner in the U.S. has been exploring with Amazon.com Inc.—the company many retailers denounce as the mall industry’s biggest disrupter—the possibility of turning some of the property owner’s anchor department stores into Amazon distribution hubs, according to people familiar with the matter.
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Consumers have no way of knowing whether software-development kits that can track their locations are embedded in their apps. PHOTO: BASTIAAN SLABBERS/ZUMA PRESS
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Anomaly Six LLC, a small U.S. company with ties to the U.S. defense and intelligence communities, has embedded its software in numerous mobile apps, allowing it to track the movements of hundreds of millions of mobile phones world-wide, according to interviews and documents reviewed by The Wall Street Journal.
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Qualcomm Inc. is lobbying the Trump administration to roll back restrictions on the sale of advanced components to the Chinese telecom giant Huawei Technologies Co., wading into the intensifying technology battle between the U.S. and China.
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National security adviser Robert O’Brien said Chinese hackers were targeting U.S. election infrastructure in the lead up to the Nov. 3 presidential election, making a new claim about the level of Beijing’s activity in the election.
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FedEx, which booked a $71 million benefit from tax-rate differences, is seeking IRS approval for an accounting change that would add $130 million. PHOTO: SOUTH CHINA MORNING POST VIA GETTY IMAGES
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There’s a simple rule for corporate tax planning in 2020: If you’re going to lose money, lose a lot of money. That’s because companies can now use losses incurred before and during the pandemic to offset up to five years of past profits. What makes this moment particularly attractive: Congress is letting companies get refunds of taxes they paid at the 35% corporate rate that existed before 2018 rather than at today’s 21% rate.
Companies can generate big losses now by packing deductions into 2020 and pushing income into the future. Nearly two dozen large publicly traded companies are already reporting more than $2 billion in combined tax benefits using this rate arbitrage, according to a review of securities filings. Tax advisers and experts expect more soon.
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An order signed by President Trump sets aside $44 billion from the Disaster Relief Fund to pay for additional unemployment benefits. PHOTO: JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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President Trump directed the federal government to provide $300 a week in additional payments to the unemployed and called on states to fund an extra $100 in weekly benefits. The measure was one of four the president signed to extend coronavirus aid after negotiators for the White House and Democrats in Congress failed to reach an accord.
An increasing number of workers were unemployed for more than three months in July, a signal that the coronavirus pandemic is likely to have a lasting economic impact on many people. The U.S. has surpassed five million confirmed cases of the coronavirus as some states saw sharp upticks while others showed signs that the spread of the virus was easing.
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