DETROIT, Nov 25 (Reuters) - General Motors Corp (GM.N) said on Tuesday it could not restart a program that allows employees to buy the company’s common stock due to restrictions imposed by State Street Bank and Trust Co, the independent overseer of the plans.
GM had planned to reinstate the program which was suspended in September when GM exhausted its authorized shares, but was told by State Street that “it was not appropriate to allow additional investments” by employees in light of GM’s financial straits.
As a result, under the U.S. securities law, directors and executive officers of the automaker would remain under indefinite restrictions of trading in GM shares, the company said.
GM, which is seeking a government bailout, posted a deeper-than-expected loss for the third quarter in early November and warned it would run desperately short of cash by early next year without government support.
While employee purchases of company stock are suspended, GM’s directors and executive officers will be prohibited from directly acquiring, disposing of or transferring any equity securities of GM.
Aside from directors and executive officers, employees are not prevented from selling GM stock.
GM shares were down 2.2 percent at $3.51 on the New York Stock Exchange near midday on Tuesday. The shares traded at nearly $30 last November. (Reporting by Soyoung Kim, editing by Matthew Lewis)