Kuwait firm indicted in November 2009 for allegedly overcharging the US government to supply food for troops in Kuwait and Iraq
Agility Public Warehousing reported a 66 percent drop
in third-quarter profit as the Kuwait-based logistics company faces charges in
the US of overbilling on supplies to American troops.
Net income fell to KD13.89m ($49.5 million)
from KD40.6m, the company said in an emailed statement.
Revenue declined to KD405.9m in the third quarter, from KD413.6m a year earlier, Agility said.
Agility, the Middle East’s largest storage and logistics
company, was first indicted in November 2009 for allegedly overcharging the
US government on a multi-billion dollar contract to supply food for troops in
Kuwait and Iraq. The company had said it’s in talks to resolve legal issues
with the US Department of Justice and there’s no guarantee a settlement will
“This expected decrease in profitability and revenue is
attributable to the challenges facing Agility’s Defense and Government Services
(DGS) business,” the company said in today’s statement.
“Major US government
contracts wind down and the company is unable to replace them with new
government business due to the legal case with the US government.”
The company said on October 11 that a U.S. magistrate
recommended the dismissal of an indictment against one of its units in
connection with the supply contract.
Agility wasn’t properly notified by prosecutors of the
criminal charges against it, US Magistrate Alan Baverman said in a report
dated September 2. Baverman is taking a motion to dismiss the case under
advisement, according to a synopsis of the proceedings in court on September 3
posted on the court docket.
“2010 has been a year of transition for Agility,”
chairman Tarek Sultan said in today’s statement. “Although we anticipate
continued challenges through the middle of 2011, we believe that we will emerge
as a stronger and more flexible company.”