PM directs federal agencies to 'investigate, file cases' against those involved in sugar scam

Published June 7, 2020
Information Minister Shibli Faraz and SAPM Shahzad Akbar addressing the media in Islamabad. — DawnNewsTV
Information Minister Shibli Faraz and SAPM Shahzad Akbar addressing the media in Islamabad. — DawnNewsTV

Special Assistant to Prime Minister on Accountability Shahzad Akbar on Sunday said that Prime Minister Imran Khan has approved a "matrix of actions" to be taken against those named in the Sugar Forensic Commission's (SFC) report.

Last month, the government had made public a report by the Sugar Forensic Commission (SFC) constituted to investigate and assign responsibility for the shortage and price hike of the commodity in the country in recent times.

Addressing a press conference in Islamabad alongside Information Minister Shibli Faraz following a meeting with the premier on Sunday, Akbar said it has been decided to take penal actions against sugar mill owners that violated the law, recover the looted money, and overhaul and reform the regulatory system.

"Seven major actions have been approved by the premier. The entire matter of Rs29 billion subsidy given to sugar mill owners will be investigated by the National Accountability Bureau (NAB). Any companies that committed violations after getting subsidy would fall within NAB's jurisdiction. Subsides given by the federal or provincial governments will be investigated.

"Political families entered the sugar business in the 1990s and since then they have crushed everyone else in the industry. A well-known family in the 1990s exported sugar to India. NAB will also investigate that case and in this regard, a reference will be drafted.

"Not only the nine mills that we have already mentioned were the beneficiaries but nearly all the 80 sugar mills," he said.

Akbar said that the Federal Board of Revenue (FBR) would launch investigations into sales tax fraud, mill owners showing reduced income and benami transactions, which he said the report had found evidence of. It has been directed to ensure that adjudication on cases and recoveries start within 90 days. The FBR has also been directed to conduct forensic audit of all mills besides those mentioned in the report, he added.

"A significant amount of money might be added to the national treasury through recoveries [made as a result of these investigations]."

The SAPM said that the third action the premier approved was investigation of cartelisation by the Competition Commission of Pakistan (CCP). "These companies became wolves and caused damage to the people and the CCP failed to check this in the past. A new team has been constituted that will submit a report within 90 days."

The State Bank of Pakistan would be directed to investigate companies that showed fake exports or who "converted foreign remittances into halal income", defaulted on loans or sold pledged stocks. It would also submit a report to the finance ministry within 90 days. "Not just a generalised report, the SBP will mention companies and their frauds by name. It will impose heavy fines on those found in violation".

The Federal Investigation Agency (FIA) and Securities and Exchange Commission of Pakistan (SECP) would investigate corporate fraud, the special assistant said, adding that stock fraud, shareholder fraud and other types of corporate fraud such as underwriting would be investigated.

The FIA would also investigate the matter of fake exports to Afghanistan and money laundering. Akbar said that "every receipt will be checked and the FIA will file cases in the courts within 90 days against those who did this."

PML-N responds

Shortly after the press conference, PML-N spokesperson Marriyum Aurangzeb, in an apparent reference to Jahangir Tareen, said that the government was preaching accountability after helping powerful "ATMs" flee the country.

She urged the prime minister to not stage a play after helping to fill the pockets of the powerful. "Only Imran Khan sahib is involved in the sugar crisis. His house at Zaman Park was built using the money from cheeni chori."

She added that the prime minister and Punjab Chief Minister Usman Buzdar should also be presented before the public. "Because of Imran's cheeni chori, the people have to buy sugar for Rs90 per kilogramme.

"The NAB-Niazi nexus will probe Imran's theft, there is no bigger joke than this. Those who are risking the country's future and economy are using the slogan of self-accountability."

The only purpose of forming the commission was to save Imran Khan and Buzdar, she said.

'Will take on all mafias'

Akbar, during today's presser, said that an investigation would also be launched to find out where provincial laws were broken. "Sugar mill owners have enhanced their capacities without showing it officially to maximise profits. Most importantly, some mills did not pay farmers their dues on time, and showed more price on harvesting of sugarcane. This will be investigated by the anti-corruption units in Punjab, Khyber Pakhtunkhwa and Sindh," Akbar said.

Referring to recommendations made by the SFC, Akbar said that the "regulatory framework would be overhauled". The commission recommended that technology and IT be used extensively going forward, the SAPM said, explaining that this would involve setting up an online stock system and putting barcodes on sugar bags.

He said the premier also recommended that a committee be formed under Minister for Industries Hammad Azhar that would determine the cost of production and set the price of sugar accordingly.

"The government will take on all the mafias in the country one by one. Everyone will be held accountable, no matter how rich or politically powerful. No exceptions can be made," Akbar concluded.

"A lot of people thought that no action would be taken because there were some big names in the report but accountability is the government's first priority," said Information Minister Shibli Faraz. He added that the farmers would benefit from the action that would be taken and efforts would be made to retrieve money that was looted.

Tareen leaves for UK

The commission’s report was presented to the media at a briefing by the information minister and prime minister’s special assistants Barrister Shahzad Akbar and Shahbaz Gill last month. The ministers had said the prime minister would decide the course of action on the report after detailed recommendations were presented to him after Eid.

The inquiry report on sugar had revealed names of many bigwigs, including Jahangir Tareen, the former secretary-general of the ruling Pakistan Tehreek-i-Insaf (PTI) and a close confidant of the prime minister, who had allegedly benefitted from the crisis.

On Saturday, the PML-N had questioned the ‘quiet’ departure of PTI senior leader Tareen for London despite being a prime suspect in the sugar scam.

“Where is the National Accountability Bureau which was to become Tarzan after Eid [according to Railways Minister Sheikh Rashid] while Jehangir Tareen left for London along with his son?” asked PML-N Punjab’s Information Secretary Azma Bokhari at a presser in Lahore.

Sugar scam

The sugar commission's report had detailed how over the years the sugar mill owners have manipulated the market to make windfall profits amounting to billions of rupees. The report also listed the nexus between these owners and various government officials that led to unregulated practices bypassing laws and often exploiting the farmers.

The commission’s report revealed how the ‘sugar cartel’ comprising 88 mills had cheated sugarcane growers and consumers at every step starting from the procurement of cane, production of sugar, sale in the local market and export, all of which led to price hike of sugar as well as billions of rupees of tax evasion.

  • According to findings, mill owners and associates took yearly benefit of Rs100-Rs150bn
  • Export was not justified due to expected lower output
  • Six groups found main beneficiaries of manipulation
  • Sugar barons always kept two record books

The SFC was constituted by the government in the first week of April following the release of two separate inquiry reports of the FIA on the issue of artificial shortage of sugar and wheat in the country and sudden increase in their prices last year.

After the release of the report, the opposition had demanded that the premier take stern action against those who had been declared responsible for the crisis by the FIA committee.

Prime Minister Khan had vowed to take action, but said he would do so after receiving the forensic audit report from the commission that he had constituted on the recommendation of the ‘initial’ reports. The commission included officials from a number of agencies and departments including the Intelligence Bureau, FIA and the Federal Board of Revenue.

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