LHC strikes down SECP reference to FIA in sugar mills case

Published November 13, 2020
The Lahore High Court has set aside a reference filed by the Security and Exchange Commission of Pakistan to the Federal Investigation Agency against the sugar mills of  Jahangir Khan Tareen and the family of Shehbaz Sharif. — Photo courtesy Wikimedia Commons/File
The Lahore High Court has set aside a reference filed by the Security and Exchange Commission of Pakistan to the Federal Investigation Agency against the sugar mills of Jahangir Khan Tareen and the family of Shehbaz Sharif. — Photo courtesy Wikimedia Commons/File

LAHORE: The Lahore High Court (LHC) on Thursday set aside a reference filed by the Security and Exchange Commission of Pakistan (SECP) to the Federal Investigation Agency (FIA) against the sugar mills of Pakistan Tehreek-i-Insaf’s leader Jahangir Khan Tareen and the family of Leader of Opposition in National Assembly Shehbaz Sharif for an investigation in light of the report of a sugar inquiry commission.

A two-judge bench also set aside an act of the FIA’s director general of writing a letter to the SECP for nominating its officers to become part of a joint investigation team (JIT).

However, the bench ruled that the FIA had lawfully and competently taken cognizance of the matters of alleged corporate fraud that led to an increase in the sugar’s price.

JDW Sugar Mills and Farooqi Pulp Mills of Mr Tareen and Al-Arabia Sugar Mills of the Shehbaz’s family had approached the LHC against multiple actions of the federal government, the SECP and the FIA.

Also sets aside FIA’s letter to SECP to be part of JIT

The petitioners had also challenged a letter written by Mirza Shahzad Akbar, the adviser to the prime minister on accountability and interior, to the FIA and the subsequent call-up notices issued to them by the agency.

However, the bench, in its 65-page verdict, finds nothing wrong with this act on the part of the adviser, saying he was merely acting pursuant to the decision of the cabinet.

“We have no reason to doubt the bona fide of the federal government and are un-persuaded on the arguments regarding ulterior motives to lurk under the surface,” says the judgment by the bench comprising Justice Shahid Karim and Justice Sajid Mehmood Sethi.

Rejecting the challenge to the call-up notices, the bench observes that the call-up notices do not make a reference to the sugar inquiry commission’s report and proceed on the basis of information available with the investigation team regarding money laundering and financial/corporate fraud.

Doubtless, the offence of money laundering is part of the Schedule of the 1974 Act and is within the cognizance of FIA, it says, adding that it cannot be left to the choice of a person to plead that he be charged for an offence under one or the other laws.

About the nomination of the SECP officials to the JIT, the bench observed the attorney general had not been able to refer to any provision, which empowers the FIA to solicit services of officers from another agency.

“Such a course of action is ultra vires and has no basis in law. The act of the DG FIA in writing to SECP for nominating two officers is struck down. Consequently, the SECP‟s letter for nominating two officers for investigation to become part of the joint team of FIA is also struck down,” the decision reads, partially allowing the petitions.

The bench also struck down the reference filed by the SECP on basis of procedural unfairness and for being a dictated exercise. However, the bench observes the SECP may choose to initiate proceedings anew, according to law.

Deciding the question of the FIA’s jurisdiction in the matter, the bench remarks, “We do not find any jurisdictional error or illegality in the exercise of jurisdiction by the FIA. We hold that the inquiry being conducted by FIA is proper and in accordance with law.”

Published in Dawn, November 13th, 2020

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