Agility is currently suspended from trading at the Kuwait Stock Exchange. The reason? A U.S. grand jury indicted Agility with charges of fraud and conspiracy alleging that it overcharged the U.S. Army on $8.5 billion worth of contracts to provide food to soldiers in Iraq, Kuwait and Jordan. This U.S. indictment will prevent Agility from getting contract awards until the issue is resolved but will not impair existing contracts with the U.S. government.
Agility has been one of the very few stars in the Kuwait SE this year. This new comes as a severe blow to an already distressed stock market. Noting that Agility heavily depends on US contracts (75% of the group’s EBITDA) this is a major major major calamity. Agility is similar to Zain in that it is an operational company with numerous companies dependent on its success. Most of these companies are trading limit down as I speak. For example, NREC (National Real Estate Co.) owns 22.44% of Agility and is currently limit down. God bless the Kuwait SE.
Below is an the statement issues by Agility:
STATEMENT
Statement by Public Warehousing Co. (PWC)
Concerning Announcement of Indictment and Qui Tam Lawsuit
The Public Warehousing Company (PWC) has for some time worked with the government to seek a mutually agreeable resolution to a contract dispute between the U.S. government and the Company and is surprised and disappointed that the government has decided to take these actions. Today, the Company was informed that the Department of Justice (“DOJ”) had obtained an indictment against the company and has intervened in a civil lawsuit under the False Claims Act, both of which allege that PWC committed fraud against the U.S. government.
The company has been the principal food supplier for the U.S. military in Kuwait and Iraq since 2003. PWC’s service has been timely, reliable and cost effective throughout its work on these competitively awarded contracts, and its performance has been unparalleled. The prices it charges have been negotiated with, agreed to, and continually approved as by the U.S. government since then. The government has consistently found PWC’s prices to be fair and reasonable.
Since 2006, the company’s “fill rates” – the number of cases of food accepted compared with the number ordered – were consistently more than 99 percent, a number that exceeds the fill rates of U.S. domestic service providers. That means that PWC was more successful in delivering food and other items to the military in a hostile war zone than other vendors have been within the safe environs of the continental U.S.
The court documents filed in the United States reveal that the investigation leading to the indictment and the False Claims Act lawsuit was instigated by Kamal Mustafa Sultan, owner of Kamal Mustafa Sultan Company, who has a long history of strong animosity towards PWC, its officers and its employees. A July 19, 2009 San Antonio (Texas) Express-News story raises major questions about the company:http://www.mysanantonio.com/military/Firm_tied_to_Iraq_scandal_profited.html
In the PWC matter, Kamal Mustafa Sultan brought a “qui tam” case under the False Claims Act in November 2005, which means that he has a financial interest in the outcome of the case. In Kuwait, Kamal Mustafa Sultan has filed more than 40 court actions against PWC, its executives and its employees, and all of the court actions have been unsuccessful.
The company has long cooperated with government reviews, inspections, audits and inquiries necessary to ensure taxpayer dollars are being spent appropriately. The company made every effort to resolve this with U.S. contracting agencies, including trying to get a formal interpretation of the contract by a neutral agency and going to mediation, but the government refused.
Our company has provided unparalleled service to U.S. troops and exceptional value for American taxpayers under the most demanding conditions ever faced by a contractor. Our success has come at a very high price. More than 30 employees have been killed and 200 injured in carrying out their work in a warzone. Attacks on our convoys have destroyed more than 300 trucks and damaged another 700.
An indictment and a complaint are merely allegations. PWC is confident that once these allegations are examined in court, they will be found to be without merit. As a result of the indictment, PWC Logistics has been debarred from future contract awards until such time as a determination has been made about the company’s current responsibility as a contractor. These allegations should have no impact on any current contracts with the U.S. government.
(1 votes, average: 5.00 out of 5)
Loading ...Tags: Agility, Agility Suspended, Kuwait Stock Exchange, PWC Logistics, US Court
As you sow, so shall you reap.
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It was only a matter of time
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FINALLY – fair pricing? haha – Agility / PWC have been making $600 million dollar annual profits on the war since 2003 … and they have NOT been modest about it!
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Agility, along with other companies, have been getting away with too much. All you have to do is talk to the TCN’s who were hired by Agility and you’ll see exactly what’s been going on. Many TCN’s were hired at a highter rate of pay and when they arrived in Kuwait, their pay was reduced drastically.
The bottom line is this….upper management continue to receive bonuses while many of the workers who make things happen don’t. This company claims that it has all these policies in place to ensure that employees are treated fairly. Why are there different pay scales for different nationalities? A secretary is a secretary, a driver is a driver, an operator is an operator regardless. The same skills shoud be paid the same rate.
Agility, u know that you’re dirty so don’t try and pull the wool over our eyes. You’re just huge with billions of dollars so you can buy your way out of almost anything. We all hope that the Justice Department finds you guilty of fraud. You need to be put in your place.
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Keynesian Reply:
November 18th, 2009 at 11:19 pm
I don’t know if that is all true, but it would be a shame if it is. However, I know they have deep-pockets. Just look at their most recent addition to the Board of Directors: Former U.S. Ambassador John D. Negroponte! Negroponte served as U.S. ambassador to Honduras, Mexico, the Philippines, the United Nations and Iraq. He also held positions on the National Security Council, served as deputy national security advisor to President Ronald Reagan, and was the nation’s first director of national intelligence. Now he sits on Agility’s Board.
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John Mathews Reply:
January 3rd, 2010 at 11:08 am
Of course they have deep pockets! Look at the pay scale of some of these hardworking third country nationals! The people that work the hardest to make things happen are the ones that always take it in the shorts.
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Kuwaiti Reply:
December 2nd, 2009 at 2:11 pm
No they aren’t paid according to their nationalities ! but the difference is due to that the company pays you basic salary and then you have the allowances which differs !!!!
There are few allowances that are for Kuwaiti only !!
and YES!!!, we do deserve being paid this money it is our country and it is our money!! Same goes vice versa if we are in another country we will be treated as foreignors
If anyone doesn’t like it then he should have stayed and worked in his own country ! But oh yes some can’t fidn jobs there or they fidn better jobs here. So it is their problem accepting it!
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John Mathews Reply:
January 3rd, 2010 at 11:04 am
Kuwaiti’s don’t pay us, the US does. The US pays Kuwait and then the company pays the employees. Am I correct so far? You say it’s your money? What’s your money? If the US didn’t save Kuwait from Iraq, you’d be working hard just like the other TCN’s in Kuwait. Or have you forgotten?
I have never seen any work ethic by Kuwaiti’s. They’re constantly off from work, or, when they come to work, they sit and talk and have servants bringing them their tea. In the Sultan Centers, they cut in front of everyone (not Americans) and are just arrogant. They drive like maniacs and everything is “wasta.” So if you’re Kuwaiti, you have lots to learn about work….cause you don’t know how to work.
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This ‘fraud’ needs to be looked at in the overall context of a war. If soldiers eat lobsters for lunch in a war zone then someone has to pay a premium for it. You cannot say lobsters cost KD 0.5 per kg in Sultan Center in Kuwait, why are you charging me KD 1.5 per kg for delivery in Iraq
http://www.thisisjustcool.com/cool-pictures/us-army-canteen-in-iraq/
Next time you are in an airport check out the price of water in the airport cafeteria. It is easily double the rate in the supermarket just outside the airport complex. Does that mean the airport cafeteria is indulging in fraud.
Differential pricing is a way of life
By the way, why single out Agility when there are bigger issues at stake
http://www.dailymail.co.uk/news/article-1228480/Army-tells-soldiers-fighting-Afghanistan-buy-Taliban-bags-gold.html
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John Mathews Reply:
January 3rd, 2010 at 11:09 am
AAA, you don’t call millions and billions a big stake? If not, what is?
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The litigation is on $60 million which in worst case scenario may go up as much as $2 billion, I wonder how did you arrive to $8.5 billion!
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Keynesian Reply:
November 30th, 2009 at 9:56 am
The litigation is on $8.5Bn worth of contracts. The prelim fraud numbers are estimated to be around $68M. This means if indicted, it would be fined with at least double that: $136M. Sorry for the confusion. Please refer to this later and more detailed post:
http://www.alphadinar.com/2009/11/18/agility-fraud-case-examined/
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it seems prayers from those underpaid employees are answered whoo to agility`s consecutive year lost report, no need to report now…
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[...] Agility Incited with $8.5B Fraud by US Government [...]
As far as salaries Agility pays better than other companies it has yearly bonus n some good features but right now US government has taken a very tough decision to cancel all their contracts because which for sure thousands of employees are going to suffer.
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John Mathews Reply:
January 3rd, 2010 at 11:15 am
Well Wisher, they pay yearly bonuses? To who? We were all hired under those conditions but never saw a bonus. So where are you getting that they pay better than some companies? Compare TCN pay in Iraq and TCN pay for TCN’s who drive into Iraq constantly. You tell me
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It was only a matter of time before Agility got hammered. Sure, they have lots of money but it’s a shame how they made that money. When you treat your employees like dirt, you will pay. Go pray some more, maybe it’ll help you kiss up and make up.
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Dear John Mathews,
I am deeply disappointed with your comment on Kuwaitis Work ethic. It is very narrow minded to generalize and say Kuwaitis have no work ethic. In every Country, Community, or Society etc. their are the good people and bad people (People who have a work ethic and people who do not). You are also stereo typing and pointing fingers on very negligible facts that you find every where. Have you ever been to Detroit ?(They cut lines over there) Miami (They drive like Maniacs). It is true that America is more civilized then Kuwait but we are a new country that got our independence in 1964 compared to 1740 or something like that of America. So please do not talk about Kuwaitis like you really know Kuwaitis. That was just your experience in the high paying job you got( which your I assume you got just because your American). By the way if you are so bothered by Kuwaitis and think we cannot work I really think you should find a solution rather than complaining. Complaining is not Professional or proactive
. Moreover, I think it is very ignorant to think that America saved Kuwait. If you put a little more effort and read about American Foreign Policy you will notice that America has been not solving problems in the Middle East but as Kissinger put it ” Crisis Management ” . I am really sorry to say your a victim of your American Media and you think you know everything just because you are Anglos axon …. I was surprised you didn’t say Kuwaitis are terrorists !!!!
P.S. This blog was created by Kuwaitis who put a lot of time and effort to accomplish. Additionally, it is very neutral and only analyzes the facts logically. I really think you should rethink what you said .
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[...] http://www.alphadinar.com/2009/11/17/agility-indicted-with-8-5b-fraud-by-us/ [...]
If any one would do their research you would realize the Swiss are involved and it seems could be the country of origin…This is about an International ruling class getting contracts, kick backs, profiteering from a war, how disgusting, The global “good ole boys club”.
I also agree with Hmoud and please accept this American’s apology for the ignorance some of my countrymen (oddly enough it usually comes from an angry white guy) spew from their lips “removing all doubt” Abraham Lincoln.
And fyi, I am from the BB and grew up fundamentalist Christian/Republican and if we were busy practicing real Christianity “We are all God’s children” Ronald Reagan, we would not be casting stones at our brothers and sisters around the world but taking responsibility for our mistakes/sins.
We are America who professes “We hold these truths to be self-evident, that all men are created equal” Thomas Jefferson wrote in our Declaration of Independence and we need to live up to those words! And stop allowing the exploitation of peoples in developing nations by the hands of our own countrymen. .
Sincerely, Miss America
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[...] after Agility’s issue with the US Government in mid November (click for details) KGL has been traded heavily. Since Agility’s case is not over yet and there is still no news [...]