The new indictment contained no new charges against Agility, the Gulf's biggest logistics firm and the main food supplier to the US military in Iraq and Kuwait.
Instead, it extended existing charges to include two company affiliates: US-based Agility DGS Holdings Inc and Agility DGS Logistics Services K.S.C., which is based in Kuwait.
The reason for doing so was to "cure" a technical problem with the original indictment, said parent company Agility, formerly Public Warehousing Company K.S.C. (PWC).
Agility is in talks with the US Department of Justice to resolve a November indictment accusing it of overcharging the US Army over 41 months on $8.5 billion in contracts to provide food to soldiers in Iraq, Kuwait and Jordan.
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 new indictment was "regrettable," the company said in a statement on Monday.
"This move serves only to taint PWC subsidiaries that have a strong record of on-the-job performance and compliance with US law and federal acquisition regulations," it said.
But the new indictment could serve to weaken Agility as it seeks to negotiate a settlement, said analyst Naser Al-Nafisi, general manager of Al-Joman Center for Economic Consultancy in Kuwait.
"It will make it more difficult to reach a settlement because new charges are new problems," Al-Nafisi said.
At present, the company is suspended from bidding for new US contracts and if that ban is extended to existing contracts it would be damaging because US contracts account for at least 50 percent of Agility's turnover, he said.
Agility is one of the most important companies on the Kuwaiti stock exchange. It was first awarded a prime vendor contract by the US Defense Logistics Agency to supply food for troops in May 2003, the time of the US invasion of Iraq.
The company says the suit stemmed from a contract dispute it had been working to resolve with the government.
Lawyers for all three Agility entities attended the Atlanta hearing at which the US subsidiary pleaded not guilty.
US Magistrate Judge Alan Baverman, who unsealed the indictment after the hearing, entered a not guilty plea on behalf of the parent company.
Agility and its Kuwaiti subsidiary said they were not fully represented in court and declined to plead. No plea was entered by or on behalf of DGS Logistics.
Agility says the original indictment was invalid because it was served against the US subsidiary rather than the parent company it named.
"By extending the indictment (Monday) against PWC to its affiliates, the US Attorney's office in Atlanta is acknowledging that it did not properly notify PWC of indictment in November," the company said in a statement.
"Today's action by the US Attorney's office is an attempt to 'cure' its invalid service of process," it said.
It was unclear whether the company hoped to get the entire case thrown out on this basis, or whether it hoped to use it as a lever in its negotiations with the government.
Agility posted a 22 percent rise in fourth-quarter net profit. The company said on Sunday it could not guarantee reaching a settlement with the US government.
