Indictment drags Agility profits down 52%
Kuwaiti supplier targeted by US prosecutors reconsiders future of military contracting arm
By Adam Schreck
DUBAI, United Arab Emirates (AP) – A Kuwaiti logistics firm facing U.S. fraud charges over food shipments to American troops said Sunday it is weighing the future of its military contracting business.
The chairman and managing director of Public Warehousing Co., Tarek Sultan, said no decision has been made for the contractor’s defense and government division, but that contingency plans are in place.
“If we cannot reach a mutually agreeable settlement, then we would need to assess all strategic options for the (defense and government) business,” Sultan said in an emailed statement. “For now, the situation is fluid.”
He did not elaborate on plans for the division. Spokesman James Gildea declined to comment further.
The company, also known as Agility, has received more than $8.5 billion in food supply contracts from the U.S. military to feed American troops in Kuwait and Iraq.
Federal prosecutors have charged Agility with making false statements, submitting false claims and committing wire fraud.
The indictment made public in November accuses the company of defrauding the U.S. government of at least $68 million. The charges were later expanded to two of the company’s subsidiaries.
Prosecutors say Agility’s contract with the government is still in effect. It is scheduled to expire in December.
Agility has been in talks with American prosecutors aimed at a settlement but has so far been unable to reach a deal. It says the charges are without merit.
The accusations nonetheless remain a drag on the company.
Agility posted a profit of 17.6 million Kuwaiti dinars ($60.8 million) for the first three months of this year. That is less than half of the 37 million dinars it earned in the same period last year.
Sultan said financial fallout from the dispute, along with the U.S. troop drawdown in Iraq and lingering effects of the global economic downturn would continue to eat into profits over the coming year.
Ongoing legal problems with the U.S. government have hurt Agility’s chances to win new contracts, which has had a “deep impact” on its defense arm, Sultan said.
The company estimates U.S. government contracts have accounted for up to 35 percent of total revenues.
Besides the military contracting business, Agility runs a commercial logistics arm it says operates in 120 countries. (Click HERE for original article)
Monday, May 17th 2010 at 5:57 am |
What ever happened to the April 26 2010, media announcement where the USG stated both parties had worked out the administrative terms of the settlement and within a week something tangible would most likely be released? Three weeks later and………..(crickets chirping). I guess we can’t even trust what the USG releases.
Wednesday, June 23rd 2010 at 11:30 am |
Contact me and I will provide documents.
Thursday, June 24th 2010 at 12:06 am |
Hello NL..
I would appreciate it if you would provide me with those related documents (The DA’s court filing pertaining to the USG-Agility settlement)
Thanks in advance ..
Thursday, June 24th 2010 at 12:28 am |
Simzer,
What’s the latest on your lawsuit against Agility? I was saddened to hear you didn’t take your AK-47 to the General Assembly meeting.
Don’t tease me like that. It’s crystal clear now that Agility is avoiding the USG and has no plans to settle now or ever. Tarek Sultan’s plan is to drag these indictments out as long as possible. Agility keeps returning to the argument that they weren’t served properly.
That’s another reason they look like asses: On one hand they claim they weren’t served properly, therefore everything should be thrown out. On the other hand they continue to say they look forward to defending themselves in court. Well, which is it? You were served properly and you look forward to your day in court OR the USG hasn’t served you properly? Make up your mind Tarek Sultan. WTF?!
Thursday, June 24th 2010 at 5:53 am |
John,
Man you should see the tough security and metal detectors located at the entrance of the Crown plaza hotel! They would’ve definitely caught me and messed up the element of surprise!
As for Agility’s messed up legal compass, Its so Funny, yet in a sickening way!! I mean i am definitely including this mess in the final structure of my lawsuit, because it shows how totally messed up their legal status is!
Man you should have see Tarek Sultan in the Stock holders meeting, he was “disgustingly” funny ..
Thursday, June 24th 2010 at 5:11 am |
Simzer-I edited out your email address publishing that makes you SPAM bait! I will forward docs to you today. And I am going to put them on Ms Sparky.
Thursday, June 24th 2010 at 5:57 am |
Thanks a lot for being our “Guardian Angel”
I truly appreciate it..
Thursday, June 24th 2010 at 7:31 am |
I’m working for my wings!
Monday, May 17th 2010 at 3:16 pm |
I am questioning the value of a Wharton MBA, as it appears that Tarek Sultan has no business acumen. He had a company that was starting to make a mark as a government contractor, and he has chosen to let it disintegrate.
Tuesday, May 18th 2010 at 11:22 am |
Agility just won (May 17, 2010) a $200M logistics contract with the UK MoD in Europe. I guess DGS has some life left in it after all. Let’s see if this new contract helps resurrect their stock from the depths of the KSE.
Tuesday, May 25th 2010 at 2:40 am |
That is something I just heard about.. !! can you refer me to your source please ? I would love to smack them with a tough lawsuit for concealing material news … I lost enough money on their stock already ..
waiting for your prompt reply pleeeeeeeeeeease !!
Tuesday, May 25th 2010 at 4:33 am |
Simzer, the new UK MoD contract was awarded to an Agility Europe affiliatebut I assume it’s part of DGS. I’ve seen nothing published in the news, but my information comes directly from two, longtime employees of Agility in Kuwait. They are both trusted sources. Can’t think of any reason why Agility wouldn’t release an announcement of this award, unless they are trying to buy huge amounts of stock in the next 30 days, have the Agility General Assembly vote to settle with the USG during their June meeting, then watch their stock jump to 650-900 fils. Can anyone else think of a reason why Agility wouldn’t release this positive infomration?
Also, Agility and the USG have been SUPER quiet since the late-April announcement that they had reach a resolution on many/most of their administrative disputes. Then nothing. I expect to see Agility vote on a settlement during the Agility General Assembly in June. Anyone that owns Agility stock can attend. Simzer, will you be there? I would raise high hell!
Tuesday, May 25th 2010 at 4:43 am |
Simzer,
Just confirmed with a third Agility/Taos employee that the British affiliate of Agility was awarded the contract with the UK MoD. Sometimes the USG requests to not publish an award notice until the protest period concludes (7 days?). Otherwise, I think concealing this award may just be a part of Tarek Sultan’s bigger scheme to destroy Agility. How low can the stock really go? It hit 485 fils and limit-down today. Most stock dropped significantly.
Be careful with investing in the KSE. It’s highly speculative.
Tuesday, May 25th 2010 at 7:58 am |
Thanks a lot JHowds for your reply. Well, basically part of my planned lawsuit is to “complain” about the mishandling of the District attorney’s office news which is pertaining to the alleged settlement and the “motion to quash”. To elaborate more, the stock jumped within couple of days from 530 fils to the range of 600-610 fils, accompanied by high volume of trading, news agencies both foreign and domestic mentioned the prosecutors office news, KSE doesn’t intervene, nor request confirmation from Agility, stock jumps almost limit up that day 660 fils with tons of trading. Next day, KSE wakes up from their sickening hangover, and halts trading with a request for confirmation. Agility, gives an extremely vague and false answer at the same time, something like “we’ve been in negotiations for a settlement with the USG for a long time, nothing new has been attained in that regard, and we promise to inform the KSE with any material advancement in its due time… bla bla bla” and totally ignored to mention a huge new piece of news that makes a big difference in the path of their case, which is the fact that the USG affirmed that a settlement has been “almost” reached, compared to the past’s mere reports by media and news agencies mentioning the “settlement” story. The stock since then was heading due South
. So what do we conclude? Someone knew about that piece of news, bought tons of stock and made not less than % 15-20 in few days, dumping the stock on speculators and people who believed in the substantial importance of the breaking news from the DOJ’s side. Good news is, a recent legislative bill was passed couple of months ago regulating what is going to be “Kuwait’s SEC”. The law is in full effect as we speak, and has severe punishments for traders or companies that play shenanigans, or commit trading crimes (such as deceive traders and investors), many of which happen on a daily basis in KSE. JHowds, Tarek Sultan can bet his Wharton’s a$$ that I will be in that Assembly, and maybe we can join forces to wreak havoc and bust the place up! It just makes me wonder whether the US and Kuwaiti Governments are in cahoots with those crooks! The Kuwaiti Govmnt through Wafra Investment (owned by the Govmnt) playing with the stock up and down (inclusive of too much false trading punishable by law), while using the public’s money in the process, and the US DOJ releasing information about the settlement almost a month ago and as you described all we hear now is .. crickets chirp and Frogs Ribbit..
Tuesday, June 1st 2010 at 5:09 am |
Simzer,
What day is the Agility General Assembly being held in Kuwait? I heard it was early to mid-June. You can find me at the meeting easily. I’ll be the one causing a raucous by questioning Tarek Sultan personally about the catastrophe that has become Agility under his watch. I’m sure I won’t be the only pissed off shareholder. Maybe we should all bring pitchforks and roast him at the stake.
Tuesday, June 1st 2010 at 6:20 am |
Pitchforks ??? Naaaah … I was thinking of something more extreme .. like AK-47′s maybe
Well, The GA is scheduled on June 10th .. in the Crown Plaza hotel. I am eager to attend and hear their answers and throw some questions of my own at them. Oh yeah, and did you guys hear about the new “mini” $ 17 million contract they signed and announced today? Horray ..Horraah (with a big thumbs down)
Tuesday, June 1st 2010 at 9:26 am |
$17M won’t even pay the salaries of their 27 Vice Presidents. It might actually be down to 20 by now. LOL. Funny, they hired a new BD Director a month ago and they fired him already. I wish they would have fired people like Mike Durnan, George Allen, Dan Mongeon, and Tarek Sultan years ago. They *might* still have a company with a decent reputation if they had. Ooh! Their stock might rise 30 fils now.(sarcasm) They are still suspended, indefinitely by the USG…..their cash cow for the past 7 years. No soup for them!
Tuesday, June 1st 2010 at 10:38 am |
“No soup for them” I love the “soup Nazi”!!
Tuesday, June 1st 2010 at 10:56 am |
At least the Soup Nazi was competent at his job. The jokers I mentioned above are so clueless and ignorant to the issues and challenges the operational staff face on a daily basis, and the fact that the retired O-6s have absolutely no experience in commercial business, it’s a wonder how Agility hasn’t gone bankrupt…..yet.
Criminal behavior only adds to the stinch that is Agility. I know dozens of high quality, former Agility employees that just got fed up with all of the BS, lying, deception, and bureaucracy of Agility Directors, VPs, and above and finally said no more. Agility may pay some of the highest wages, but that’s because that’s only way they can keep staff on board. Pay them to keep their mouths shut, eyes shut, and act like drones.
Wednesday, June 16th 2010 at 5:39 am |
So much for thinking that Agility stock priced at 530 fils was a good deal. Now their stock is selling at 385 fils. Ouch!
Tuesday, May 25th 2010 at 5:54 am |
Let me know if you file suit and I will post it if I can.
Good Luck.
Tuesday, May 25th 2010 at 8:01 am |
Ms Sparky, Thank you for the offer, and I will definitely try to get a translated copy of the lawsuit for you to check, and hopefully post on your site.
Thanks Mam ..
Tuesday, May 25th 2010 at 9:24 am |
Thanks Sir …(what a terrible Typo)
Sorry about that ..
Wednesday, May 19th 2010 at 11:58 pm |
Appears Tarek Sultan thought he could manipulate the billing of a billion-dollar contract (SPV) to make a few extra ‘pennies’ worth of profit. They should have settled years ago when the USG was asking for $80M.
Wharton MBA….$250,000. Enhanced lifetime earnings….$3,000,000. Common sense to settle with the USG years ago……PRICELESS! I guess Allah forgot to hand out common sense to Mr. Sultan. Goes to show you the complete arrogance of this a$$ clown.
Wednesday, May 26th 2010 at 2:22 am |
Simzer and JHowds,
I’ve been following the Agility DGS debacle for for over five years and I can truly feel for all of the quality employees that have come and gone and/or are still having to deal with this joke of a company. What the hell is Tarek Sultan doing with Agility? In 2003-2005 the company looked so bright and prosperous, but with the hiring of former military officers (O-6 and above) that had no clue how to run a commercial business (have names if you want them) and the fact that they neglected and intentionally defrauded the USG for millions of dollars, this company has been derailed. I hear they have shuffled the incompetent and criminal DGS leadership to different commerical departments (GIL, TMG, corporate, etc.) with the intent to appear as if they have cleaned house, but the same ass clowns are still in charge.
I want to hear from some former Agility employees(current even better). I would LOVE to see the shareholders and/or the Board of Directors vote Tarek Sultan’s ass out come the June 2010 General Assembly.
Thursday, May 27th 2010 at 3:15 am |
It looks like Agility is trying to raise some cash:
Agility considers proposed sale of long-term bonds
http://www.arabiansupplychain.com/article-4260-agility-considers-proposed-sale-of-long-term-bonds/
Wednesday, June 9th 2010 at 2:45 pm |
Simzer,
Please update us all on the events of the Agility General Assembly on June 10. We’re all curious to see if Tarek Sultan discusses the “little problem” amongst shareholders that have been taking a beating for the last 8 months in the Kuwait Stock Exchange. Honestly, I doubt Tarek will speak a word regarding the indictments and/or a settlement unless he absolutely is forced to. That’s where you step in Simzer with your AK-47. Tarek would simply prefer to ignore the “little problem” as long as possible. How is this joker still the CEO?
Thursday, June 10th 2010 at 3:41 am |
Hello Jhowds .. Guys,
I just came back from the “ridiculous” Assembly. To make a very ridiculous long story a short ridiculous one, I will say that Jhowds’s anticipation and doubts were very true. Tareq Sultan evaded every single arrow, bullet, and brick thrown at him with regards to the indictments. He wasn’t doing it “skillfully”, or “convincingly”, rather he was hiding behind his “majority shareholders”, and the stupid laws of my country that govern the exercise of General Assemblies. Nothing!! not one word he was able to say nor answer back to the tens of questions that the attending shareholders engulfed him with. All he was saying “if your question is not related to the item on the GA agenda being discussed at the moment, then I have no answer for you”. When i asked a direct question “why was the single most important item discarded from the agenda” (pointing at the indictments), he answered (repulsively) “do you own %10 of the company’s shares?”
Do you believe this guy ?? :s
Anyways, we have officially protested item number 8 on the agenda “releasing the board members from liabilities….etc”. Which means now, its time for plan B, a faceoff in court!
It is worth to mention that I was the “loudest articulate” voice over there. Tareq Sultan hated me! After the assembly was dismissed, dozens of reporters congregated around me asking me for my info and contact numbers, and a copy of the indictment.
I can’t wait for my case to get on track and start rolling, and see then if Mr. Sultan will be obliged to answer our questions or not!
Ps. if any of you guys have any legal documents (including the indictments) I would appreciate it if you shared it with me.
Thursday, June 10th 2010 at 4:19 am |
Thanks for the “front row seat” accounting of what happened! Any info I get is yours!! Be sure to keep us posted. What a snake Sultan is!
Thursday, June 10th 2010 at 5:15 am |
Don’t mention it Sir. I am sure news agencies will import a more descriptive narration of what took place over there, and thank you for your continuous support.
Thursday, June 10th 2010 at 5:08 am |
Although I’ve never met Tarek Sultan, I knew this would happen. Just reinforces everything I’ve been told by my contacts that work for Agility (currently/formerly). What?! You have to own 10% of the company for the CEO to answer you? WTF?! What kind of rule is that? Obviously the Sultan family is manipulating that ‘rule’ to avoid interrogation by the company’s constituents. WTF?! This is outrageous!
Thursday, June 10th 2010 at 5:24 am |
Well no, the reason why he asked that disrespectful question (%10 ownership) is because the law here states that any holder of that amount (%10) can raise the request to add new items on the GA agenda. He struck me with that “brilliant” (NOT) question, because of the fact that I was raising hell for the omission of that elemental and critical item from the GA agenda (the indictments).
Thursday, June 10th 2010 at 7:05 am |
Agility’s stock continues to drop. Now at 450 fils. Ouch! A far cry from the 4.000 KD of yester year. LMAO. Simzer, do you still own some stock?
Thursday, June 10th 2010 at 8:03 am |
Unfortunately Yes
I do own the stock, but I am in a much better position because my cost is around the 600 fils spot. I was totally short of this stupid stock until the news broke out from the DA’s office regarding the “settlement”!! so I was basically a victim of misinformation and lack of transparency from both sides (USG and Agility).
Thursday, June 10th 2010 at 5:37 am |
Remember, Tarek Sultan is also under criminal indictment. He has arrogantly ignored all related to this issue. He, in all his alleged brilliance, is ignorant on the laws of the US. Ignoring it or using family influence will not make it go away
Thursday, June 10th 2010 at 6:50 am |
Did any shareholder with 10%+ ownership stand up immediately after you and pose the same questions? If not, why not? Sounds like this whole meeting was simply held to go through the formalities. What a racket!
Thursday, June 10th 2010 at 8:14 am |
Shareholders with 10%+ ? man even Tareq Sultan himself doesn’t own that much.
“Sounds like this whole meeting was simply held to go through the formalities”
You nailed it again man.. that is exactly what it was .. and it is usually the case when boards are protected with 50%+ holdings. It is when Public companies basically become “not so public”
I hope you get my point.
Thursday, June 10th 2010 at 6:16 pm |
It makes one speculate… He fired his chief counsel (Sam) and his ethics manager in an effort to appease the government and possibly settle back in February. Do you think that the fact the he immediately signed them on as consultants ticked off the govt?? And are they still advising him? Intriguing
Friday, June 11th 2010 at 4:52 pm |
Tarek also fired (read relocated) Toby Switzer and Steve Lubrano in 2008 to appease the USG’s Prime Vendor Gods. Tarek simply moved Toby to a position as his consultant and Lubrano to CEO of TMG. It’s all smoke and mirrors people, but I think the USG has finally realized the obvious.
Thursday, June 24th 2010 at 9:10 am |
After reading through some of the documents….
Can you believe Tarek Sultan (Agility) paid two people to lie that they saw Kamal Sultan having lunch with the judge? LMAO. Are you kidding me? I totally believe it! Agility is a laughing stock in the US and their name is quickly being added to MOST “do not work with” lists in the US and the Middle East. Looks like Tarek Sultan’s chickens are coming home to roost. Make that camels.
Thursday, June 24th 2010 at 9:37 am |
I was skimming quickly through what seems to be the largest document (150 pages) which is basically a compilation of multiple documents and filings. I was astonished to see how this issue was discussed on Department of States head’s level!! I don’t know whether i should call it “corruption” or something else?!
Anyways I am still to find the court filings related to the April 26 DA’s announcement of a possible administrative settlement (mentioned in the following link)
http://www.reuters.com/article/idUSN2619283020100426
Thursday, June 24th 2010 at 9:48 am |
Simzer,
I’ve heard so many proclamations from the USG over the years with so many ending up to be inaccurate and misleading. Appears the USG has many masters and each one has an opinion. I was astonished the USG made that announcement on April 26 and thought for sure it meant a settlement was a done deal. So did many investors. Typcially the USG bites its tongue until all agreements and made and signed off.
Thursday, July 1st 2010 at 3:23 am |
John,
I am sorry buddy, I just saw your post! Well what you are saying is true, and its big stuff! I mean I am sure there must be Legal implications for such acts, even if it was committed by the USG! The DA says a settlement is in its final stages, I buy the stock, the stock dives like a Chunk of Lead into the bottom of the price index, and then …….. Zilch! I am sure that there must be away to hold them accountable for there “official announcements and court filings”! The misleading that took place, caused people to lose money and be in Financial and Psychological distress ..
Don’t you agree ?
P.S I am still hoping for those case filings to surface and get my hands on them ..
Thursday, July 1st 2010 at 9:24 am |
Keep that dream smizer –
but if you are referring to attempting to hold the U.S. Government responsible in some way. Under the constitution the U.S. Government is immune from such actions.
Additionally, if a settlement is reached any documention available will be strictly general – stating only the basics regarding the charge, the settlement amount and that is about it.
You can after the case is either settled or the prosecution complete attempt to file a Freedom of Information Request (FOIA) for the case documents you want to see. But anything that has not already been released to the public – will be ‘redacted’ (ie – marked out with a big old black marker).
To make matters even more outside of the actions of the US Govenment – you are talking transactions on a Foreign Stock Exchange.
Thursday, July 1st 2010 at 10:10 am |
Hi there ..
Well, I was under the impression that the “Federal Tort Claims Act” The people can hold the USG liable for its acts of negligence or irresponsibility. The damage that took place, and the losses that occurred were of direct result to the “misleading and misinformation” committed by Federal employees (The DA’s office in this case). However, what you’re saying could be very true, and I could be mistaken in my conclusion.
As for the document, well let me copy direct quotes from the Filing that was published by the press …
1- “In the last week, substantial progress has been made in resolving the administrative aspects of this matter, the final component that needed to be resolved,” U.S. prosecutors said in a court filing on Friday.
2- “It is anticipated that an agreement in principle on an administrative resolution will be reached early next week,” the filing said.
3- “The parties expect that before May 3, 2010, they will … allow time for defendant PWC’s board of directors and general assembly of shareholders to approve all aspects of the settlement agreement, including a resolution of this case by a plea,” the filing said.
Those Three quotes had to come from a tangible and a hard copy filing that was presented to court on that date (April 26th). So just like the previous filings got out and into our hands, I am really hoping this one would as well..