If an API is manufactured by a contractor and not yet released by their QA, can this be shipped by the contractor, to the original company with the intention of then shipping on to another contractor for manufacturing the drug product?

There’s no prohibition in Q7A about that. The expectations are that you have a system in place
including proper documentation and that you have adequate control over it to prevent the material
from ultimately getting into trade before release by the Quality Unit. One may very well question
the wisdom of having it shipped all over the place still awaiting a release, but there’s nothing that
would prohibit it.