CCP raids Tareen-owned sugar mill head office

CCP did not name JDW but a commission official disclosed that the raid was conducted on the head office of the group

Shahbaz Rana September 26, 2020


To check the possibility of anti-competitive activities, the Competition Commission of Pakistan (CCP) on Friday “impounded proofs” in a raid on the JDW group’s sugar mills head office.

The raid was conducted a day after PTI disgruntled leader Jehangir Tareen, whose family owns a majority share in the JDW group’s sugar mills, submitted a detailed reply to the FIA in response to its queries regarding the sugar scam probe.

Tareen, who is currently in the United Kingdom (UK), had failed to appear before the FIA on Sept 19 after which the agency re-summoned him on Thursday.

The CCP did not officially name the JDW group but a commission official disclosed that the raid was conducted on the head office of the group.

The CCP carried out a search and inspection of a sugar mill head office in Lahore as part of an ongoing enquiry against the possible violations of the Competition Act, 2010 by the sugar industry, according to a statement issued by the anti-trust watchdog. It added Friday’s raid was a continuation of the commission’s earlier search and inspection carried out on September 14, 2020, of the Pakistan Sugar Mills Association’s Lahore and Islamabad offices in which PSMA’s record including correspondence done through letters, emails, and whatsapp messages between various members and office-bearers of the association was impounded.

The CCP said the impounded data included exchange of emails “between a senior official of one of the sugar mills (member of PSMA) and PSMA Punjab zone office-bearers regarding sensitive commercial information such as mill- and district-wise sugar stock position, and even the quantity of cane crushed, sugar produced, recovery percentage, carry forward old/raw sugar, total sugar, quantity sold, balance and sold percentage”.

The CCP official said the person concerned was the employee of the JDW group.

The official hand-out further said that an analysis of the whatsapp messages, shared in a group of PSMA officials, showed that the same senior official of that sugar mill was found to be in constant communication with regard to price and stock-related data of sugar mills.

“The impounded data indicated the senior official’s continued involvement in sharing, receiving sensitive information regarding the sugar industry since 2012 when he was nominated as the focal person for coordinating the sugar stock position by the PSMA,” according to the CCP.

The CCP suspected that the compilation, consolidation, and distribution of sensitive commercial information using the PSMA platform could lead to possible proof/corroboration of collusive activity/cartelisation that is in violation of the Competition Act. The search team has impounded the relevant print and electronic material from the JDW sugar mill premises for further scrutiny.

Prime Minister Imran Khan had ordered an inquiry into the sugar industry affairs after the prices of sugar abnormally increased.

The sugar prices that were on an average at Rs75 to Rs77 per kilo in January this year have risen to on average Rs98 per kilo. The minimum average increase of 22% was witnessed in Islamabad and the maximum -- 29% -- in Karachi.

The retail prices of refined sugar have witnessed an exponential increase, especially between July and August 2020, across all cities of Pakistan with the media also reporting that in some cities, such as Peshawar, sugar was selling for as high as Rs110 per kilo.

Between July and August 2020, prices of sugar increased by Rs11 per kilo and the overall average increase in the price of sugar between January and August 2020, across various cities, was 26%.

However, Jahangir Tareen, once a close confidante of Imran Khan, denied committing any wrongdoing.

A story appeared in The Express Tribune cited Tareen’s reply to the FIA in the case. “It must be pointed out that no offence has ever been committed by JDW, or by me, and no proof of any such offence has been brought forth either by the JIT or the CIT. In fact none of the queries and concerns raised in the call-up notices make out any offence under the Schedule of the FIA Act, 1974”, according to Tareen’s reply to the FIA.

The PTI stalwart had been summoned by the FIA for the second time on September 24 but could not appear. He sent a letter along with a comprehensive reply to the CIT.

The FIA had sought details about Tareen’s assets, bank transactions, especially transfer of money abroad, bank accounts of his family members and his employees and the sugar-related transactions of his firm JDW.

The FIA led sugar inquiry report revealed that two main groups had obtained maximum benefit during the crisis; one of the groups, JDW, belonging to Tareen which had six sugar mills, obtained 12.28% of the total export subsidy amounting to Rs3.1 during 2015-18.

The report said that during 2018-19, Tareen’s companies exported 17.24% of the total production of sugar and availed 22.71% of total export subsidy.

The CCP officials said that the PSMA’s actions suggested that the association has become a cartel. But it has been avoiding punitive actions due to various cases pending in courts for almost a decade.


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