UPDATE 1-Agility auditors warn on U.S. suspension impact

* Auditors say suspension of U.S. contracts could impact co

* No provisions made against in half year results
(Recasts, adds details, background)

KUWAIT, Aug 15 (BestGrowthStock) – A prolonged suspension of U.S.
contracts could have a material impact on government-related
businesses of Kuwait’s logistics firm Agility (AGLT.KW: ), the
firm’s auditors said on Sunday.

Agility, formerly Public Warehousing Co. K.S.C. (PWC), is
facing U.S. fraud charges for overcharging the military in
contracts worth $8.5 billion spanning more than three years.

“Prolonged suspension could have a material impact on the
Group’s government related business and may result in the
associated assets being impaired,” auditors Ernst & Young and
Kuwait’s Albazie & Co said in a report.

Agility is in talks with the U.S. government to settle the
charges, but has said there are no guarantees an agreement
could be reached.

Separately, the firm said on Sunday in a letter to the
Dubai bourse that the U.S. Defense Logisitics Agency has
informed it to be prepared to perform the prime vendor 2
contract through Dec. 5, 2010, which is the natural end of the

On Thursday, Agility posted a 52-percent fall in
second-quarter net profit. [ID:nLDE67B1F6]

The auditors said that due to inherent uncertainty
surrounding the fraud cases, no provision was recorded by the
management in its half-year financial statements.

They also said that pending the final outcome of a court
case involving its subsidiary, the company should reduce its
other current assets by 10.1 million dinars ($35.08 million)
and retained earnings attributable to the equity holders by 6.1
million dinars.
(Reporting by Diana Elias; Editing by Dinesh Nair and Jonathan

UPDATE 1-Agility auditors warn on U.S. suspension impact