Sugar Mills Association terms investigation report ‘one-sided’

LAHORE: The Pakistan Sugar Mills Association (PSMA) on Thursday submitted a detailed response to the Federal Investigation Agency (FIA) over the sugar crises probe report, terming it as “propaganda” and “one-sided”.

In a 45-page letter to the FIA director general (DG), the PSMA said that allegations levelled against sugar mill owners were false and that the investigative agency had not included their view in the report following a probe into the recent sugar crisis.

The body rejected the probe report as “propaganda” and claimed it was “one-sided”, adding that it would not accept a forensic report either.

The association also raised objections against the investigative committee officers, saying that the FIA report was based on misleading assumptions. It said that the officers on the investigation committee did not have any experience in the field of business or any knowledge of market-related facts and the investigation committee was not even aware of the fact that the sugar business is the only business in Pakistan in which the price of sugarcane is fixed but not of sugar.

The reply stated that often, the government allows exports in case of excessive domestic production of sugarcane; export of sugar is absolutely not unheard of.

The PSMA said that there was no shortage of sugar during the period being investigated by the committee, something which the committee itself acknowledged in the report. The report mentions the rate of sugar as Rs51 per kilogram in December 2018 but not that the sugar was produced in the 2017-18 season, it added.

The response also stated that sugarcane was at its highest production level in recent history, bringing prices down and resulting in cheap sugar reaching the masses. With the end of the overproduction season and the arrival of new crop, sugarcane prices have returned to their original level, which has led to an increase in sugar prices, it added.

The association said that the report acknowledges, on factual basis, that there is stiff competition among all sugar mills yet at the same time calls it a cartel, which is a laughable notion.

The reply said that the investigative committee was unable to understand that forward contracts were considered a normal part of trade around the world and the PSMA has nothing to do with gambling. The reply implicates brokers as solely responsible for this, whose actions have had a negative impact on the sugar business.

It further said that a letter was written to the inquiry commission asking to allow a clarification of its position, but to no avail, therefore, in light of all the facts, it has become clear that the FIA report was misleading and false.

The association warned that if they were not provided justice, they would approach the courts. Copies of the reply were sent to Prime Minister Imran Khan, all four chief ministers and Special Assistant to Prime Minister on Accountability Barrister Shahzad Akbar.

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