Sugar Inquiry Report leads to multiple probes against mills

NAB, FBR, FIA, SBP, CCP assigned to investigate different aspects of cartelization and submit reports within 90 days

By: News Desk      Published: 06:09 PM, 7 Jun, 2020
Sugar Inquiry Report leads to multiple probes against mills

There were no immediate registration of cases, no arrests and no confiscation of assets as the government unveiled a new set of actions in connection with the sugar inquiry report referring a string of investigations to different state institutions against almost all the sugar mills.

Prime Minister Imran Khan on Sunday approved the action strategy against those responsible for the sugar crisis in the country as per inquiry commission report. He chaired several meetings at his Banigala residence in this connection.

Special Assistant to Prime Minister on Accountability Barrister Shahzad Akbar Sunday also called on Prime Minister Imran Khan to discuss the Sugar Inquiry Commission report. During the meeting, Shahzad Akbar briefed the prime minister on implementation of the recommendations by Sugar Inquiry Commission, said a PM Office press release.

The sugar inquiry commission’s report investigated how the price of sugar was fixed, how exports of the commodity were faked on sales taxes and how billions of rupees were overcharged by sugar mills owners.

In its inquiry report, the commission held that many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the US and Dubai, therefore seemingly whitening money and earning dollars at the same time.

Jahangir Tareen, Khusro Bakhtiar’s brother and Moonis Elahi were also declared as the most beneficiaries of the sugar subsidies. It also revealed that six major sugar mill groups were acting as "cartels".

Addressing a news conference after attending meetings at Banigala on Sunday, Shahzad Akbar said the inquiry report covered the subsidies given to the sugar industry during the last five years, the cartelization of the industry and the political influence which has infested this whole mechanism.

He said the action plan approved by the prime minister consisted of three sets of procedures: First is the penal action for violating the laws and it is also related to recoveries, the second set of actions is about the regulatory mechanism and the third one is about setting the price of the commodity for which what kind of mechanism should be in place to determine the actual cost of production.

Elaborating, Shahzad Akbar said the whole process will lead to seven major actions. First of all, matters relating to subsidies during the past five years are being referred to the NAB for criminal investigation determining any wrongdoing on the part of industry players in the garb of availing the subsidy.

“This will cover the Rs6.5 billion subsidy given during 2014-15, another Rs6.5 billion subsidy given during the year 2015-16, Rs20 billion subsidy given during 2016-17, the Rs4.8 billion subsidy given by the Sindh government and the subsidy given by the Punjab government,” he added.

Shahzad Akbar said the NAB will look into who gave the subsidy and who were its beneficiaries. The matters related to a total of Rs29 billion subsidies given during the last five years.

The special assistant to the prime minister also said that the NAB will also analyse the subsidies given during the last 25 years and in this regard the government will send a reference to the NAB. Political families since the 1990s are exploiting this system and the export of sugar to India during that period will also be put on the NAB radar, he added.

He said the Federal Bureau of Revenue (FBR) will look into evasion of sales tax and income tax by the mills, and the benami transactions which would ultimately lead to the recoveries.

Shahzad Akbar said the FBR has been asked to complete its task within 90 days. “The FBR will also be asked to conduct audit of all the sugar mills which are over 80,” he added.

The Competition Commission of Pakistan will also investigate the cartelization of the sugar industry and submit its report to the government within 90 days.

Shahzad Akbar said the Federal Investigative Agency (FIA) will be asked to looked into the smuggling of the commodity to Afghanistan and will also cover money laundering aspect attached to it.

He said State Bank of Pakistan will look into the fake exports and loans issues.

The special assistant said the anti-corruption establishments in the three provinces – Punjab, Sindh and Balochistan – will probe the matter relating to the additional crushing by the mills. He said the mills have expanded their crushing capacities by eight or ten times without acquiring any approval from the government.

The anti-corruption establishments will investigate the matter and submit to reports to their respective provincial governments within 90 days and the federal government will keep an eye on all this process, he maintained.

Shahzad Akbar said the regulatory mechanism related to the stocks of the commodity, sugarcane production and fixing the price keeping in view the cost of production.

Shahzad Akbar stated that the prime minister has decided to make everyone accountable and the influential people behind it will not be spared. He said political families have set up sugar mills and taken up subsidies by manipulating financial and administrative authorities.

He also mentioned that during the 1990s, political families jumped into the sugar industry and almost none of them followed the protocols or quota.

Shahzad Akbar also said that the sugar mill owners have also been accused of money laundering in the name of exports so the details of such cases have been forwarded to FIA for further investigation. Moreover he also said that the Office of Special Assistant of Accountability shall also be looking into all the investigations.