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Sun 28 May 2017 12:38 PM

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Kuwait's Agility settles legal case over contracts

Logistics firm pleads to ‘misdemeanour’, all settlements subject to court approval

Kuwait's Agility settles legal case over contracts
Logistics firm pleads to ‘misdemeanour’, all settlements subject to court approval

Kuwait-based Agility has settled a legal battle over contracts it held with the US Army between 2003 and 2010, it said on Saturday.

Agility, one of the Gulf’s largest logistics firms, was the biggest supplier to the US Army during the war in Iraq, but was accused of defrauding the military on food supply contracts.

The filing of a criminal lawsuit against Agility in 2009 led the firm to be replaced as a supplier to the US Army and it was barred from bidding from new US contracts. Separate civil proceedings were also filed.

The contracts in question spanned seven years, involved nearly 200,000 invoices to the US government, and were valued at over $8.6 billion.

Agility said in a statement on Saturday that it had settled “on terms that preserve and validate the company’s reputation for integrity”.

It said that in the criminal portion of the case it had agreed to plead to a misdemeanour in connection with a single invoice valued at $551.

The misdemeanour was a minor offence, the statement said, unrelated to any of the original criminal charges. It requires Agility to pay a maximum of $551 in restitution, but carries with it no criminal fine.

In the parallel civil proceedings, Agility said it had agreed to pay $95 million in cash and work with the US government on the mutual release of all outstanding claims related to the food-supply contracts.

The agreement will resolve all legal issues related to these contracts and enable Agility to resume the pursuit of new US contracts, the company said. Meanwhile, the US government has agreed to remove Agility and all of its subsidiaries and affiliates from the list of suspended companies on its database.

However, the settlements are subject to final court approval, the statement said.

Agility CEO Tarek Sultan said: “The settlement affirms our long-standing view that Agility acted transparently and responsibly as it carried out to near-perfection the extraordinarily complex mission to deliver food and related materials to US troops in an active war zone.

“Today’s settlement removes uncertainty for investors and lenders, ends costly litigation, and opens a pipeline of potential government and commercial contracting opportunities.

Sultan added: “Agility has a healthy balance sheet and low net debt,” Sultan said. “The company can meet its obligations under the settlement without jeopardizing its current investments or its future growth.

“By bringing the case to an end, we have the ability to unlock additional value for shareholders.”

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