KUWAIT, (Reuters) – Kuwait’s Agility, the Gulf’s biggest logistics firm, has been replaced by a new company as the main supplier to the U.S. military in Kuwait and Iraq, the company said in a statement on Thursday.
The company said the U.S. Defense Logistics Agency informed the company of its decision to name a new supplier. Agility will continue to supply the U.S. military for six months “to guarantee continuity of supplies,” according to a statement on the Kuwait bourse.
It did not provide the name of the new company.
Agility, formerly Public Warehousing Co. K.S.C. (PWC), is in talks with the U.S. government to settle indictments accusing it of overcharging the U.S. Army on supply contracts in Iraq, Kuwait and Jordan.
The first indictment was in November. On Monday, U.S. authorities extended the charges to include two company affiliates: U.S.-based Agility DGS Holdings Inc and Agility DGS Logistics Services K.S.C., which is based in Kuwait.
If convicted under the False Claims Act, prosecutors say the company faces probation and a fine of up to twice the gain it realized or twice the loss to the United States.
The company says the original indictment was invalid because it was served against the U.S. subsidiary rather than the parent company it named.
Shares of the logistics firm, which were temporarily halted earlier in the day, were down 3.3 percent to 580 fils on the Kuwait exchange. There are 1,000 fils in a dinar.