Sugar mill accuses TCP of concealing facts in default case
Claims it has cleared almost all its liabilities
A worker checks the flow of sugar inside a sugar factory. PHOTO: REUTERS
ISLAMABAD:
Tandlianwala Sugar Mills, a public listed company, has accused the Trading Corporation of Pakistan (TCP) of hiding facts from the Public Accounts Committee (PAC) in a seven-year old case regarding default on supply contracts and emphasised that the company has settled almost all its liabilities.
The TCP - a state-owned trading house set up to ensure price stability in the market - claimed before PAC recently that Tandlianwala Sugar Mills had defaulted on Rs1.15 billion worth of contracts.
Officials of the TCP and Ministry of Commerce also told PAC that the sugar mill was not paying the outstanding amount and the case was pending before the Sindh High Court.
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“The TCP is fully aware that the TCP’s stock lying in TSML (Tandlianwala Sugar Mills) was forcibly lifted by the directorate of food, Khyber-Pakhtunkhwa (K-P) government in 2009,” said Ahmad Jehanzeb, Executive Director Finance of the mill, in a statement on Thursday.
Tandlianwala Sugar Mills is owned by the family of Haroon Akhtar Khan, who is Special Assistant to the Prime Minister on Revenue.
The executive director further said the money provided by the TCP for sugar supply contracts stood slightly over Rs2 billion, of which the trading house lifted Rs1.3 billion worth of commodity. He said the remaining advance provided by the TCP was Rs692 million, of which the company paid Rs531 million to the TCP.
“The remaining balance is held up as the TCP has refused to release bank guarantees along with part of retention money amounting to over Rs100 million,” said Jehanzeb.
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A sugar crisis had erupted in the country in 2009 that led to the Supreme Court of Pakistan’s intervention. The TCP then entered into supply contracts with sugar mills and about half a dozen of them defaulted on the contracts, according to the commerce ministry.
It said the TCP was in the court of law against six mills and pursing the case vigorously.
However Tandlianwala Sugar Mills, which is listed at the Pakistan Stock Exchange, said it was not the fault of the company that it defaulted on contract delivery.
It revealed that in order to meet market needs, the K-P government lifted stocks from its warehouse and supplied in the market to avoid shortage. Jehanzeb said the sugar mill offered a settlement to the TCP in order to clear the dues. Under the same agreement, the mill paid Rs593 million to the TCP.
However, the TCP backed off the settlement and filed a suit in the Sindh High Court. The suit was in final stages and would be decided soon, he said. He claimed that Tandlianwala mills offered several times to settle the matter through arbitration, but the TCP was not willing.
“It is very unfortunate that officials of the organisation have given a statement (before PAC) which is not true and have tried to defame shareholders of a very reputable public listed company,” said the statement.
Commerce Secretary Younus Dagha, who represented the TCP in the PAC meeting, was not available for comments on the Tandlianwala mills’ statement.
Earnings per share of the mill came in at Rs2.573 for the nine months ended June 30, 2017. The company recorded an after-tax profit of Rs302.9 million for nine months, according to the balance sheet.
Published in The Express Tribune, August 25th, 2017.
Tandlianwala Sugar Mills, a public listed company, has accused the Trading Corporation of Pakistan (TCP) of hiding facts from the Public Accounts Committee (PAC) in a seven-year old case regarding default on supply contracts and emphasised that the company has settled almost all its liabilities.
The TCP - a state-owned trading house set up to ensure price stability in the market - claimed before PAC recently that Tandlianwala Sugar Mills had defaulted on Rs1.15 billion worth of contracts.
Officials of the TCP and Ministry of Commerce also told PAC that the sugar mill was not paying the outstanding amount and the case was pending before the Sindh High Court.
Govt to frame policy to restrict spread of sugar mills in cotton zone
“The TCP is fully aware that the TCP’s stock lying in TSML (Tandlianwala Sugar Mills) was forcibly lifted by the directorate of food, Khyber-Pakhtunkhwa (K-P) government in 2009,” said Ahmad Jehanzeb, Executive Director Finance of the mill, in a statement on Thursday.
Tandlianwala Sugar Mills is owned by the family of Haroon Akhtar Khan, who is Special Assistant to the Prime Minister on Revenue.
The executive director further said the money provided by the TCP for sugar supply contracts stood slightly over Rs2 billion, of which the trading house lifted Rs1.3 billion worth of commodity. He said the remaining advance provided by the TCP was Rs692 million, of which the company paid Rs531 million to the TCP.
“The remaining balance is held up as the TCP has refused to release bank guarantees along with part of retention money amounting to over Rs100 million,” said Jehanzeb.
LHC irked by sugar mills ignoring stay order
A sugar crisis had erupted in the country in 2009 that led to the Supreme Court of Pakistan’s intervention. The TCP then entered into supply contracts with sugar mills and about half a dozen of them defaulted on the contracts, according to the commerce ministry.
It said the TCP was in the court of law against six mills and pursing the case vigorously.
However Tandlianwala Sugar Mills, which is listed at the Pakistan Stock Exchange, said it was not the fault of the company that it defaulted on contract delivery.
It revealed that in order to meet market needs, the K-P government lifted stocks from its warehouse and supplied in the market to avoid shortage. Jehanzeb said the sugar mill offered a settlement to the TCP in order to clear the dues. Under the same agreement, the mill paid Rs593 million to the TCP.
However, the TCP backed off the settlement and filed a suit in the Sindh High Court. The suit was in final stages and would be decided soon, he said. He claimed that Tandlianwala mills offered several times to settle the matter through arbitration, but the TCP was not willing.
“It is very unfortunate that officials of the organisation have given a statement (before PAC) which is not true and have tried to defame shareholders of a very reputable public listed company,” said the statement.
Commerce Secretary Younus Dagha, who represented the TCP in the PAC meeting, was not available for comments on the Tandlianwala mills’ statement.
Earnings per share of the mill came in at Rs2.573 for the nine months ended June 30, 2017. The company recorded an after-tax profit of Rs302.9 million for nine months, according to the balance sheet.
Published in The Express Tribune, August 25th, 2017.