The share price of Jahangir Tareen’s JDW Sugar Mills Limited fell Rs21.05 on Monday after the prime minister’s inquiry committee, which was investigating the recent sugar crisis, identified Tareen’s mills as the largest beneficiary of total export subsidies worth Rs2.4 billion that the Punjab government gave to sugar mills.
The report, published on Saturday, cited untimely exports as the major cause of the sugar crisis in Pakistan, which started last year and continues to date. Tareen’s sugar mills availed Rs561 million or 22.71pc of the total export subsidy, it added.
The JDW stock, which closed at Rs280 on Friday, fell 7.5pc, the highest threshold by which a share can rise or fall in a day, within minutes after the market opened on Monday.
The benchmark KSE-100 Index was down 2.6pc when this report went online (at 2:40pm).
JDW’s share was worth Rs259.64 when its trade halted as per the rules of the stock market. The stock had reached a peak of Rs614 on January 23, 2017.
JDW Sugar Mills comprise of three units, two of which are located in Rahim Yar Khan in south Punjab while the other is located in Ghotki, Sindh. It accounts for 17pc of the country’s total sugar product.
Meanwhile, in response to the report, Jahangir Khan Tareen said that a “certain group within the party and the PM’s Principal Secretary Azam Khan were making efforts to sideline him”.
Tareen alleged that Azam Khan had been damaging PM Imran’s government for a long time and that he had also played a key role in getting the Federal Investigation Agency’s (FIA) report against him. The PTI stalwart said that he was in contact with PM Imran and would stand by him through thick or thin.
“However, it is a fact that my relationship with Imran is not as close as it used to be,” Tareen admitted.
He maintained that the FIA report had failed in answering fundamental questions raised by him.
He said that the sugar price had increased due to an increase in the support price of sugarcane, adding that Rs180 support price would mean the ex-mill rate of sugarcane is Rs65.
Defending the decision to export sugar, Tareen said that the decision could only be proved wrong if there was no stock of sugar in the country. He said that the country had 4,57,000 tonnes of surplus sugar reserves in November last year. He added that no one pockets the subsidy price and rather the subsidy had helped increase the country’s exports.
Tareen said that Pakistan had benefitted up to Rs30 billion from Rs3bn subsidy on sugar export. Referring to his provision of sugar to the Utility Stores Corporation (USC), Tareen said that despite a rise in sugar prices, he had provided 20,000 tonnes of sugar to Utility Stores at Rs67/kg which benefitted the people by Rs250m.