Kuwaiti logistics firm Agility said on Monday it was in talks with the US government regarding a settlement in a fraud case, but no deal has been reached yet.
“A deal has not been reached until now, and there are no guarantees that these negotiations would lead to a solution,” Agility said in a statement on the Kuwaiti bourse Web site on Monday.
Earlier, the Kuwait bourse halted trading in Agility’s shares pending clarification of reports the logistics firm is near to a settlement.
Several Kuwaiti newspapers carried reports on Monday about Agility seeking a settlement of up to $600m with the US government.
“Until now the final settlement has not been signed, as some of the points are still pending, however the amount is between $500m and $600m,” Kuwaiti daily al-Qabas said in an unsourced report.
The firm will seek to schedule the settlement amount over a a five-year period, Qabas said, adding the settlement will allow Agility to acquire new contracts.
Agility is accused of overcharging the US Army on $8.5bn worth of contracts to provide food to soldiers in Iraq, Kuwait and Jordan.
If convicted of violations of the False Claims Act, the firm faces probation and a fine of up to twice the gain it realised or twice the loss to the United States.
“A settlement would be better for Agility, but I do not think that Agility will sacrifice huge amounts in the settlement,” Mustafa Behbahani, a director at Kuwait Gulf Consulting Co said on Monday. “It all depends on the future deals Agility is eyeing.”
“If the future contracts are worth four or five times more than the settlement amount, this would be in favour of the firm,” he added.
Last week, an Agility spokesman said a court hearing was being rescheduled and no new date had yet been set.
The Kuwaiti firm announced last week that US defence contractor DynCorp International had dropped its US unit as a subcontractor in a US Army deal.
Agility said it was looking at legal options over DynCorp International’s decision to drop Agility Defense and Government Services Inc as a subcontractor as of December 17.
Agility’s shares fell 3 percent on the Kuwait bourse on Monday after trading resumed. (Reuters)
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