Sugar mafia in NAB's crosshairs

PM approves seven-point ‘action matrix’ on commission’s recommendations


​ Our Correspondent June 07, 2020
PM's aide on accountability Shahbzad Akbar (left) and Information Minister Shibli Faraz address media in Islamabad. SCREENGRAB

ISLAMABAD: Prime Minister Imran Khan has given the nod to the National Accountability Bureau (NAB) and other state institutions to take a seven-point “matrix” of actions against the individuals and companies that an inquiry commission had found were responsible for the sugar crisis in the country, the premier’s aide on accountability said on Sunday.

“The prime minister has approved the recommendations made by the commission in its inquiry report as well as some additional ones,” Special Assistant to the PM on Accountability Shahzad Akbar said at news conference accompanied by Information Minister Shibli Faraz after the premier chaired a meeting on the issue at his Bani Gala residence earlier in the day.

The recommendations included legal action against sugar mill owners found involved in illegal activities and recovering the ill-gotten money from them, overhauling of the regulatory framework and rationalising of sugar prices based on the actual cost of production.

The PM’s aide said seven major actions had been approved. The matter of Rs29 billion in subsidies given to the sugar industry during the tenure of successive governments since 1985 will be sent to the NAB for investigation and further action.

Akbar maintained that political families entered the sugar business in the 1990s and formed a cartel destroying others in the industry. Without naming anyone, he said a well-known family in the 1990s exported sugar to India.

“NAB will investigate this matter and a reference will be prepared in this connection,” he added.

The SAPM further said nearly all 80 sugar mills were beneficiaries of the subsidies, not only the nine that had been mentioned earlier.

According to the report, the stakeholders of the mills involved in wrongdoing include PTI senior leader Jahangir Tareen, PML-Q’s Moonis Elahi, PML-N President Shehbaz Sharif’s son Salman Shehbaz, Federal Minister Khusro Bakhtiar’s relative Omar Shehryar and the Omni Group.

As per the second point of action, the Federal Board of Revenue (FBR) will investigate income and sales tax frauds, evasions and benami transactions.

The commission had detected several tax fraudulent practices of sugar mill owners during its investigation and found that they had concealed production and sales to evade income and sales tax. The FBR has been asked to submit its report to the federal government through the finance ministry and start the process of recoveries within 90 days.

The third action approved by the premier is the investigation into the cartelisation and anti-competitive collusion in the sugar industry by the Competition Commission of Pakistan (CCP). The inquiry commission had found that the CCP conducted a probe into matter in the past but failed to take any action. The government has decided to appoint new members of CCP within a week and it will submit hand over its report to the federal government through the PM’s aide on accountability within 90 days.

The issues related to export proceeds, loans defaults/write-offs and sale of pledged stock have been sent to the State Bank under the fourth action. The SBP will submit its report to the federal government through the finance ministry within 90 days.

The fifth action is the probe into corporate frauds committed by sugar mills through associated companies by the Federal Investigation Agency (FIA) and the Securities and Exchange Commission of Pakistan (SECP). They too will submit their findings to the government within 90 days.

The sixth action approved by the premier is the FIA probing into the fake export of sugar to Afghanistan and money laundering through bulk cash transactions that surfaced during the investigation of the commission. The agency will submit its report on the matter to the government within 90 days.

The commission also found that sugar mill owners were involved in various offences under provincial laws including payment to sugarcane growers less that the support price and illegal deductions on account of weight. Under the seventh action, this matter has been forwarded to the Anti-Corruption Establishments (ACEs) of Punjab, Khyber-Pakhtunkhwa and Sindh for further investigation. The ACEs will also hand over their reports within 90 days.

“The prime minister is determined that everyone will be held accountable, irrespective of political affiliation and influence,” Akbar said.

Speaking on the occasion, Shibli said the PTI government was committed towards the accountability of all those who had put the country and institutions at stake for the sake of their vested interest.

“Our first and foremost priority is to protect the interests of the people,” he added.

During the meeting held on the implementation of the commission’s recommendations, the prime minister said no one was above accountability and those identified in the inquiry report would not be spared.

“Those who took advantage of the poor will not escape accountability,” he added. The meeting was attended by the chief ministers of Punjab and K-P, federal ministers and SAPMs. The participants agreed that criminal cases should be lodged against the people involved in the sugar crisis.

The prime minister said apart from the sugar industry, all sectors linked to essential goods would be regulated.

He ordered immediate measures to lower the sugar prices across the country and an audit of all the mills.

The SAPM on accountability also held a separate meeting with the prime minister to brief him on the implementation of the commission’s recommendations.

Last month, the federal government had shared the details of the FIA-led sugar crisis inquiry commission’s forensic report — a damning document that outlines a series of misdeeds by sugar mill owners.

The alleged fraudulent activities include fudging the production cost to claim subsidies, manipulating the market, underreporting their sales, committing fraud and exploiting farmers.

The sugar barons raked in a “windfall profit” of Rs100 billion during the sugar crisis this year alone.

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