After delaying its court hearing for a fifth time, Agility said that it has entered a not guilty plea and asked the court to set a briefing schedule to keep the Judge updated on the progress of settlement talks with the US government. “The request for a briefing schedule is intended to preserve PWC’s rights while the company and the Department of Justice conduct discussions aimed at a resolution of the case,” Agility said in a statement. The company is in active negotiations and we hope this can be resolved,” Agility lawyer Richard Deane said yesterday. Further, he pointed that discussions were “not conclusive.” An Agility company spokesperson elaborated that, “The court will set a schedule for both sides to file papers so the process can move forward, but no dates have been scheduled at this point. ”The company would like the court to determine if it has been served properly before entering a plea. The judge therefore entered a plea on the company’s behalf so it could set a schedule for future papers to be filed,” the spokesperson added.
The uncertainty is considered a significant overhang on the company’s shares which have plummeted by more than 50% to KD0.600 fils from last October levels of KD1.300. Prosecutor Barbara Nelan squashed hopes for a fast resolution as she expected “a long and complex case.” The stock is set to go no where until there is more clarity.
As a background, Agility was accused on November 17 in an $8.5Bn fraud and conspiracy case by the US government. The indictment was initiated by a whistle-blower suit filed by Kamal Mustafa Al-Sultan, the owner of a company that partnered with PWC to submit a proposal for the contracts, according to Justice Department officials. It will prevent Agility from bidding for contracts during the legal proceedings but the suspension doesn’t preclude it from completing current contracts. This is considered a severe blow for the company as it derives 75% of its EBIDTA from US government contracts (Cheuvreux estimates). Litigation risk is high as Agility stands to loss a minimum of approximately $136 million.Kuwaiti press reports have said Agility could be paying anything from a few hundred million dollars to $3 billion in an out-of-court settlement.
Previous Related Articles:
1. Agility Postpones Hearings as it Seeks Settlement
2. Agility Indicted with $8.5B Fraud by US Government
3. Agility Fraud Case Implications
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Just a clarification that neither Agility nor it’s lawyer entered the plea, the judge did so on behalf of the company as Deane stated he was not authorized to enter a plea at this time.
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“The indictment was initiated by a whistle-blower suit filed by Kamal Mustafa Al-Sultan, the owner of a company that partnered with PWC to submit a proposal for the contracts”. For those that may not be aware, KMS sued Agility a number of years ago in the Kuwait courts over the original Prime Vendor contract. He lost. The “whistle-blower” suit may therefore have some “issues”. KMS was never actually involved in either the original contract, or any of the follow ons, which raises questions as to where he got the data that was supplied to the US authorities.
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Agiltiy is done w/. the times of curuption both in Kuwait and outside are so exposed. the owners have terrible reputatin in Kuwait. but now they must face their most important customer w/ these overcharging claims. I wouldn’t be surprized since they purchase their pershiables from Sulatn Center (another listed company the family controls.)
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