Kuwait’s Agility to pay $95mn to settle US ‘food supply’ case

DUBAI / Reuters

Kuwait’s Agility, one of the largest Gulf logistics companies, said it had agreed to pay $95 million in cash to settle a civil lawsuit
accusing it of defrauding the
United States military on food supply contracts.
It follows the earlier settlement of the parallel criminal portion of the case involving more than $8.6 billion of contracts that the company held from 2003 to 2010 when it was the primary food supplier to the US army in the Middle East, including during the war in Iraq.
In addition to the $95 million Agility will pay to settle the civil case, Agility and the US government have agreed to mutual releases of all outstanding contract claims related to the food-supply contracts, it said. The deal resolves all legal issues related to the contracts for Agility staff, directors, officers and affiliates, it said, adding the terms of the settlement were subject to final court approval.
The settlement will allow Agility to once again pursue new US government contracts, it said. The criminal proceedings, first filed in November 2009, led Agility to be replaced as the main Middle East supplier to US forces and the firm was barred from bidding for any new US contracts while the court case was pending.
“Today’s settlement removes uncertainty for investors and lenders, ends costly litigation, and opens a pipeline of potential government and commercial contracting opportunities,” said Agility chief executive Tarek Sultan.
“The company can meet its
obligations under the settlement without jeopardising its current investments or its future growth.” At one stage, the US military
contracts accounted for around 40 percent of Agility’s revenues and also provided it with a 30 percent margin, analysts estimated at the time.
In the criminal portion of the case Agility said it had agreed to plead to a misdemeanour in connection with a single invoice valued at $551, requiring it to pay a maximum of $551 in restitution, but no criminal fine.