Davos // Agility, the region's biggest logistics company, hopes to reach a settlement with the US government over allegations of fraud.
The case involves more than US$8 billion (Dh29.38bn) worth of food contracts with the Pentagon.
"We disagree [with the allegations] and feel very strongly we did the right thing," said Essa al Saleh, the chief executive of Agility - Global Integrated Logistics, the company's commercial arm, on the sidelines of the World Economic Forum's annual meeting in Davos.
"We are very much working through the process and hopeful we can reach a settlement on those terms." He declined to say how much a likely settlement would be.
US prosecutors filed a civil suit in November 2009 accusing Agility of defrauding the government by allegedly overcharging it more than $60 million in its $8.5bn food contracts.
Company profits fell by two thirds in the third quarter of last year compared with the same period in 2009 after it lost its position as the main logistics supplier to the US army in the Gulf.
An indictment by the US department of defence meant it was stripped of lucrative contracts to supply food to US troops in Kuwait, Iraq and Jordan.
Securing such deals following the US-led invasion of Iraq in the Second Gulf War helped to fast-track Agility's expansion.
The company, based in Kuwait, is focusing on stronger growth in the commercial side of its business in emerging markets to offset a ban on bidding for new US government contracts, said Mr al Saleh.
Agility is benefiting from improving supply chain demand as the global economy picks up.
The company anticipates its profits will bounce back this year as it expands its commercial business in emerging markets, which represents the larger part of operations. It ships a range of goods, including electrical items, chemicals and food, by air, sea and road.
"The government side has obviously decreased and affected our business and the commercial side continues to grow," Mr al Saleh said.
Agility cut staff across its government operations last year because of its dispute in the US. The company now employs 25,000 staff in 550 offices across 100 countries.
This year it will consider recruiting again if growth projections are achieved.
"We scaled back our resources but we believe that is behind us," he said. "In 2011 we are hopeful of a growth year and in that sense we do see opportunities in terms of trade and revenue and hiring."
Higher oil prices and ambitious infrastructure spending means the firm is particularly upbeat about potential in Saudi Arabia and the UAE in the region.
Last week, it released its annual Agility Emerging Markets Index, showing that China, India and Indonesia were the three most attractive emerging markets for logistics companies. Countries were ranked on their proximity to end-consumers in the West, level of barriers to entry and efficiency of transport services.
In the US civil case, Agility is accused of falsely inflating prices for perishable goods and other local markets items. It is also alleged to have overcharged the government by failing to disclose discounts it received.
Mr al Saleh said the matter was a contract dispute. "We continue to be believe we can reach an agreement," he said.
