Top Democrats in the House of Representatives on Wednesday announced a probe into a $765 million US government loan to photo giant Eastman Kodak to manufacture pharmaceuticals amid the coronavirus pandemic.

The US International Development Finance Corporation (DFC) announced last week it would lend Kodak money to expand its operations and hiring to create drug components that are in short supply, potentially revitalizing a company that's seen its fortunes fade as cellphones have replaced cameras and film.

However, five Democratic lawmakers including Maxine Waters, chairwoman of the financial services committee, and Eliot Engel, chairman of the foreign affairs committee, in a letter to DFC called Kodak "an organization that was on the brink of failure in 2012 and was unsuccessful in its previous foray into pharmaceutical manufacturing."

They requested the agency turn over documents regarding its communications with Kodak about the loan.

Senator Elizabeth Warren on Monday made a separate request to the Securities and Exchange Commission (SEC) to investigate potential insider trading just prior to the loan's announcement on July 28.

The Massachusetts Democrat pointed to an eight-fold surge in the trading volume of Kodak stock on July 27, before the share price skyrocketed after the loan's announcement, at one point climbing 500 percent before receding.

Eastman Kodak has seen its business fade in recent years as cellphones have replaced cameras and film
Eastman Kodak has seen its business fade in recent years as cellphones have replaced cameras and film GETTY IMAGES NORTH AMERICA / KEVORK DJANSEZIAN

The Wall Street Journal reported that the SEC is investigating the circumstances of the loan announcement.

SEC Chairman Jay Clayton declined to confirm the investigation in an appearance on Fox Business Network on Wednesday but warned companies to watch their disclosures.

"Investors need to know that there's integrity in our marketplace and that businesses are releasing information that is material to investors in a fair and comprehensive way. Our law requires it," he said.

President Donald Trump on Tuesday distanced himself from the loan, saying "If there is any problem, we will let you know very quickly. But I wasn't involved in it."