Commerce adviser testifies before sugar probe commission

Updated 15 May 2020

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Sindh chief minister refuses to do so, saying the matter pertains to Punjab. — Aurora/File
Sindh chief minister refuses to do so, saying the matter pertains to Punjab. — Aurora/File

ISLAMABAD/KARACHI: Adviser to the Prime Minister on Commerce Razak Dawood on Thursday appeared before an inquiry commission investigating a sugar scam and recorded his statement on the decisions taken by the Sugar Advisory Board regarding export of the commodity.

The commission had also summoned Sindh Chief Minister Syed Murad Ali Shah, but he refused to appear before it and said the issue pertained to the province of Punjab.

Mr Dawood is the fifth high-profile figure to appear before the commission looking into the sudden spike in sugar and wheat prices last year. The commission is tasked with issuing a forensic audit report on the 2019 sugar and wheat crises.

Mr Dawood confirmed to Dawn that he appeared before the commission to record his statement, but declined to provide any details. He said he would not talk to the media on the issue.

However, when pressed to share some of the issues raised during the hearing, the premier’s adviser said he would make his position clear on Friday (today). “I will issue a statement on May 15 to clarify my position,” he said.

Sindh chief minister refuses to do so, saying the matter pertains to Punjab

Mr Dawood’s statement before the commission may be very important given that soon after the release of the first report on the sugar and wheat crises the prime minister took away the portfolio of ministry of industries and production from him and that of ministry of food security from Khusro Bakhtiar. Mr Bakhtiar was later given the portfolio of economic affairs.

Mr Dawood as chairman of the Sugar Advisory Board had proposed to the Economic Coordination Committee (ECC) of the federal cabinet that export of sugar might be allowed. The ECC allowed export of 1.1 million tons of sugar in October and December of 2018.

Out of the total allocation of the quota, only about 750,000 tons of sugar was exported. The average retail price of sugar was Rs53.75 per kilogram in 2017-18, Rs61.43 in 2016-17, Rs64.03 in 2015-16 and Rs58.91 in 2014-15, respectively. The price of sugar increased to about Rs80 per litre when the sugar crisis was at its peak by the end of December 2019.

An increase of Re1 in the price of sugar at the retail level means the net spending of Rs5.1 billion by the consumers. The yearly consumption of sugar in the country is between 5m and 6m tons.

An earlier inquiry report filed by the Federal Investigation Agency (FIA) on the crisis had revealed the names of some bigwigs, including Jahangir Tareen, a former secretary general of the ruling Pakistan Tehreek-i-Insaf, and close relatives of leaders of the party’s allies, who had allegedly benefited from the crisis.

However, the government constituted the inquiry commission in the first week of April and asked it to submit a forensic audit report on April 25. This deadline was later extended till May 16.

Sindh CM’s stance

The inquiry commission headed by the director general of FIA, Wajid Zia, had requested Murad Ali Shah twice to appear before the panel.

In response, Sindh’s Advocate General Salman Talibuddin sent a letter to the FIA head on Wednesday, in which he said it was evident from the findings of an inquiry committee that all acts of omission and commission responsible for the alarming increase in the price of sugar were centred in and confined to Punjab.

“Given this, we find it difficult to understand why the government of Sindh is being dragged into the quagmire created by the government of Punjab and is being asked to provide a briefing (on) the years 2017-2018 which cannot conceivably have any bearing on the task assigned to the sugar inquiry commission. For your information, during 2017-2018 the price of sugar (was) actually reduced, at least in the province of Sindh,” the letter contended.

It was evident from the inquiry commission’s own report that the Sindh chief minister was not asked to appear before the inquiry committee throughout the period in which it was functioning to brief it on the issue of subsidy granted by the provincial government in 2017-18 on the export of sugar over and above the subsidy allowed by the federal government, the letter said.

It said that nobody from Sindh had featured in the inquiry committee’s report as having played any part in or being responsible in any way for causing illegal increase in the price of sugar on account of the events that took place exclusively in Punjab.

“It is clear from the report of inquiry committee as well as the contents of DG FIA’s letter dated March 16 that all matters falling within paragraph 3(k) of the terms of reference have been inquired into and findings in respect of them have been given and all that has been recommended now (is) the conduct of verification of the source reports through forensic audit and physical stock-taking of a few of the mills identified in the committee’s report,” it added.

The provincial law officer in the letter further contended that asking the chief minister to appear before the commission did not fall within its terms of reference set out in the interior ministry’s notification issued on March 16. The message asked the FIA chief to immediately withdraw his letters issued on May 11 and 13 on the subject.

Published in Dawn, May 15th, 2020