By Eman Goma
UPDATE 1: Firm denies fraud allegations after a US grand jury accused it of overcharging.
, a Kuwaiti firm supplying food to US soldiers in Iraq and Kuwait, said it had been temporarily suspended, but not debarred, from new US government contracts pending the outcome of a grand jury indictment on allegations that it overcharged.
was indicted on Monday, under its previous name, Public Warehousing Company, KSC (PWC). The firm is accused of overcharging the US Army to the tune of $60m over a 41- month period, on $8.5bn worth of food supply contracts.
"The Defense Logistics Agency (DLA) has temporarily suspended PWC from being awarded any new business until it determines that the company is presently responsible. The company has not been debarred from US government contracting,"
said in a statement published by the Dubai bourse.
said, corrects its own statement made one day earlier saying it had been debarred from new US contract awards.
No decision on whether to debar the company would take place until all the facts of the case have been reviewed,
, the principle food supplier to the US military in Kuwait and Iraq, said previously that the indictment and complaint were without merit and would not impact current contracts with the US government.
fell more than 8 percent on the Kuwaiti bourse on Tuesday in the wake of the news.
receives 37 percent of its revenue through logistics support to the US government and other agencies, according to a recent report from Goldman Sachs.
It competes with regional firm
and global players such as DHL, UPS, FedEx and TNT.