Kuwait Agility's UK, Hong Kong Units Fined In Cartel Probe

Thursday, Mar 29, 2012

DUBAI (Zawya Dow Jones)--Kuwait-based Agility (AGLTY.KW), the biggest logistics provider by market value in the Persian Gulf, said Thursday the European Commission has imposed fines totaling nearly EUR5 million in connection with its investigation of price fixing in the air freight forwarding industry.

The European Commission imposed a fine of EUR2.29 million on Agility's subsidiary in the United Kingdom, and a fine of EUR2.66 million on its Hong Kong subsidiary, the logistics provider said in a statement on the Dubai Financial Market, where it's cross listed.

The probe concerned price-fixing in four separate cartel infringements, including freight-forwarding services from the U.K. to outside the European Economic Area; from the EEA to the U.S.; from China to the EEA; and from southern China and Hong Kong to the EEA. The Commission fined 13 other operators in the case.

Agility added that it is "carefully reviewing" the Commission's decision.

In Oct. 2007, Agility's UK subsidiary along with "other major players in the freight forwarding industry received requests for information from the Commission [the EU competition authority] in connection with an industry-wide investigation into the setting of surcharges and fees," the statement said.

Freight-forwarding consists of organizing the transport of goods including customs clearance, warehousing and ground services. It is traditionally a low-margin, equipment and labor-intensive industry, where friendly rivals have enabled smoother global services.

Agility, which previously operated under the name Public Warehousing Co., has been accused of conspiracy and fraud related to alleged overcharging of the U.S. government on food contracts to supply troops in Iraq. Agility has denied the allegations.

Its shares closed trading Thursday unchanged at 0.400 Kuwaiti dinar ($1.44) in an overall lower Kuwait market.

-By Brinda Darasha, Dow Jones Newswires; +9714 446-1688; brinda.Darasha@dowjones.com

(END) Dow Jones Newswires

29-03-12 1046GMT