ISLAMABAD:
The federal government has finally ordered the relevant authorities and institutions to launch a crackdown against the sugar mills – responsible for a steep hike in prices of the commodity earlier this year – on the basis of an inquiry commission’s report.
According to sources, Special Assistant to the Prime Minister on Accountability Shahzad Akbar on Monday sent letters to the Federal Investigation Agency (FIA), the Securities and Exchange Commission of Pakistan (SECP), the Competition Commission of Pakistan (CCP), the Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) to initiate action against sugar mafia.
He also dispatched letters to the chief secretaries of Punjab and Sindh governments, while enclosing the sugar inquiry commission's report. The sugar inquiry commission – headed by the FIA chief – was formed to probe into a sudden shortage of sugar in the country that resulted in hike in its prices in January this year.
In its preliminary report – unveiled on April 5 – the commission had claimed that sugar mills belonging to families of the country’s top politicians – PML-N’s Shehbaz Sharif, PTI’s Jahangir Tareen and Khusro Bakhtiar, PML-Q’s Moonis Elahi and PPP’s Asif Ali Zardari – were among the beneficiaries of the crisis.
In its forensic report – issued on May 21 – the commission had accused the sugar mill owners of earning illegal profits to the tune of billions of rupees through unjustified price hikes, benami transactions, tax evasion, misuse of subsidy and purchasing sugarcane off the books.
A number of sugar mills had later challenged the commission in the Islamabad High Court (IHC) whose single bench on June 20 declared the commission “legal”. On July 14, the Supreme Court also vacated a Sindh High Court (SHC) order to stop the government from taking action against mill owners.
Akbar in a news conference on July 17 announced that the government was now free to take action against sugar mafia and on Monday he sent a letter to the relevant authorities to launch a crackdown.
In his letter to the FIA and the SECP, the SAPM directed the institutions to investigate instances of corporate fraud as indicated by the commission's findings.
"Additionally, the SECP may also in light of findings of the sugar inquiry commission fix responsibilities and take cognisance of the failure of the external auditors/firms and also its own regulatory oversight mechanisms, as per applicable laws," the letter read.
Akbar's letter to the CCP said that the sugar commission conducted a forensic audit of nine mills and "pointed out clear evidence of cartelisation and anti-competitive practices by sugar mill owners and brokers which led to hoarding, orchestrated ex-mill and retail price manipulation through speculation, abuse of dominant position by the sugar cartel and non-provision of utility stores corporation".
The PM's aide directed the CCP to investigate and "determine the reasons, magnitude and inordinate delay in taking action against the sugar cartel despite earlier internal findings regarding cartelisation". The authority was also directed to take "penal, corrective and mitigating measures" where mandated.
His letter to the FBR said the commission's audit of the nine mills pointed out "various instances of concealment of business/financial turnover in sugarcane procurement, crushing, sugar production and sale through accounting fraud (over-invoicing, under invoicing, off the books activity and double book keeping etc) which led to sales/income tax fraud".
According to the letter, the commission also highlighted money laundering practices through benami transactions and "financial jugglery like fake advances from customers".
The PM's aide directed the FBR to "undertake a comprehensive audit of all sugar mills in the country in light of findings of the commissions to unearth every instance of concealment and tax-fraud”, as well as the benami transactions in accordance with the law.
He asked the SBP to investigate all sugar mills in the country with respect to the offences indicated in the commission's report, which include loan defaults, suspicious exports proceeds realisation, disbursement of subsidy to exporters "despite payment to cane growers below the support price and misappropriation of pledged sugar stocks".
Akbar's letters to the chief secretaries of Punjab and Sindh said that the commission found "various instances of payments to cane growers below the support price, interest-based loans to growers by sugar mills and consequent profits and unauthorised enlargement in the crushing capacities of various sugar mills which are in derogation of the various provincial laws".
Both the provinces have been requested to undertake "investigation to unearth full spectrum of offences committed under the relevant provincial laws and take penal and corrective measures as per law".
All recipients of the letters, with the exception of the provincial chief secretaries, have been directed to wrap up the investigation and submit their respective reports to the federal government within 90 days.
The letters said that the federal cabinet approved the action plan against the sugar mafia on June 23.
PM orders actions against wheat hoarders
Prime Minister Imran Khan on Monday chaired a meeting to review availability and prices of wheat and sugar in the country and directed the chief secretaries to accelerate action against elements involved in wheat hoarding
“With mutual consultation, they [chief secretaries] should evolve a mechanism to bring uniformity in prices of wheat and flour throughout the country,” Premier Imran said.
The meeting was attended by Minister for Industries Muhammad Hammad Azhar, Minister for Information and Broadcasting Senator Shibli Faraz, Finance Adviser Dr Abdul Hafeez Shaikh, Commerce Adviser Abdul Razak Dawood, Special Assistant to PM on Information Lt Gen (retd) Asim Saleem Bajwa and secretaries of the concerned ministries.
The provincial chief secretaries attended the meeting via video link, according to a statement issued by the PM Office media wing.
The prime minister was apprised that the government of Punjab had been supplying more than 15,000 metric tonnes of wheat to the four mills on a daily basis.
The Khyber-Pakhtunkhwa chief secretary informed that the government had procured 80,000 metric tonnes of wheat from the Pakistan Agriculture and Storage Corporation (Pasco) whereas an agreement for procurement of additional 100,000 metric tonnes of wheat had been reached.
The prime minister was told that due to release of wheat by the concerned government sector, the availability of wheat had improved, besides, a positive impact was witnessed with regard to its prices.
A report entailing actions against elements involved in hoarding of wheat was also submitted to the prime minister.
The meeting also reviewed progress on import of 150,000 metric tonnes of wheat by the government and private sector.
Addressing the meeting, the prime minister said that flour is the basic need of the public and its availability at affordable prices should be ensured.
About abundant availability of wheat in the market, the prime minister said that its import process should be expedited.
The meeting also considered availability of current sugar stock, strategy to meet the local requirements and the future needs.
The prime minister directed that special attention should be paid to ensure availability of sufficient sugar at affordable price.
He also directed that it should also be ensured that sugar mills start crushing process on time and without any delay, besides asking the relevant authorities for planning and making of arrangements for the import of sugar in case any need arose.
(With additional input from App)
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People at large need to cut down on using sugar. For example if they put two spoons of sugar in a cup of tea, they should put one spoon instead. The intake of sugar is harmful for the body and people in the west have cut it drastically through their own efforts. So is smoking.