Action against sugar mafia on the cards

ISLAMABAD: The government is likely to take strict action against those involved in the sugar crisis as fears of price hikes on basic commodities rise again.

In this regard, Special Assistant to Prime Minister (SAPM) on Interior and Accountability, Shahzad Akbar, while addressing a press conference here on Saturday said that an inquiry into the sugar scandal was being carried out impartially as per the law. He said that no one is being targeted and this investigation is not person-specific

Akbar said that there were reports that sugar prices would be increased in the month of Ramzan.

“In order to check the artificial price hike of sugar through speculation, ex-mill price of sugar has been fixed at Rs80 per kilogramme in Punjab,” he said, adding that none of the governments in the past has done so. 

Referring to objections raised in front of the media by estranged PTI leader Jahangir Tareen over allegations of fraudulently misappropriating shareholder’s money and committing money laundering through the sugar business by the Federal Investigation Agency (FIA), the SAPM said that the reservations “were incorrect and the inquiry was being carried out impartially”.

The special assistant had started his media talk giving a brief background of the history of sugar crises in the country, dating back to late Gen (r) Ayub Khan’s era, and added that the federal cabinet had ordered an inquiry into the sugar crisis in May last year after an FIA-led inquiry commission submitted its report.

At the same time, he added that he was facing immense pressure in the process and there were concerns by all stakeholders including, the Pakistan Sugar Mills Association (PSMA) against the ongoing inquiry. 

“Accountability is not an easy task. You cannot make friends while doing it,” he remarked.

He said that actions were being taken against those involved in the sugar scam on the recommendations of the sugar commission report that was transparent and the government had not provided protection to anyone.

The special assistant said that three FIRs had been registered in light of the findings of the report.

“The sugar mills have been manipulating the situation. Since ex-mill price is not determined by the authorities, the vacuum gives space to profit mafia and these are the people who neither own mills nor are sugarcane growers and not even authorised dealers, but they operate the network of price setting through verbal communications,” he said.

“FIA officials in Karachi and Lahore conducted operations against these manipulators and confiscated their laptops and mobile phone sets, and it was unearthed that there were 16 WhatsApp groups to set future sugar price,” he said.

“However the sugar mills too are not innocent and they were part of this chain as they benefited from these price manipulators,” Akbar added.    

He informed that the additional benefits were deposited in fake or benami accounts and only in the Lahore zone of FIA, 10 FIRs have been registered against 464 personal bank accounts of 40 major such manipulators or brokers, showing Rs106 billion turnover for this season.

These accounts have been frozen and based on the ledgers of these accounts 392 benami personal bank accounts have been identified, showing a turnover of Rs666 bn, but these accounts yet not been frozen, and their data has been forwarded to the state bank and the FBR for action under the know your customer (KYC) regime.        

The special assistant informed about the new Punjab provincial law titled – Punjab prevention of speculation in essential commodities Ordinance 2021, which has been enforced recently.

He said that this law covers sugar, edible oil, ghee, wheat flour and rice, and price speculations in these items have been made a crime now. “Besides, the whole supply chain in the sugar sector has been streamlined in only two departments – the cane commissioner and the relevant deputy commissioner,” he added. 

He highlighted that the sugar inquiry commission report was presented to the federal government in May 2020 and at that time three types of actions were taken — penal action, administrative action and legislative reforms.

“The journey from May 2020 till now was not an easy task, he said. The Federal Board of Revenue was asked to launch a forensic audit of the sugar companies.

Akbar said that revenue generated from the sugar industry had shown a 100 per cent increase and the FBR had found embezzlement of taxes in the sugar industry amounting to Rs400bn in five years and taken action against sugar mills in Punjab and Sindh.

“The sugar commission report was challenged in the courts but the courts upheld the report and asked the government to take action,” Akbar said, adding that the report had recommended investigations against nine major sugar mills.

He said that the Competition Commission of Pakistan (CCP) had started to impose fines on sugar mills as the stay order on CCP orders had been vacated by the courts due to efforts made by the government.