Sugar scam: Head of investigation resigned quietly 15 months ago

Inquiry into artificial price hike could not be completed, culprits get off scot-free.

ISLAMABAD:

The nation will probably never know the names of those who made billions out of the sugar price scam of 2009 as a judicial commission could not complete its investigation in absence of much-needed financial resources.

Justice (retd) Sardar Raza Khan, who was the sole member and head of the commission, quietly tendered his resignation almost 15 months ago after he got the ‘cold shoulder’ instead of a helping hand from the government, according to people close to Khan.

Khan, who was supposed to submit an inquiry report to the prime minister in 45 days, submitted the resignation on August 19, 2011 in a letter addressing former prime minister Yousaf Raza Gilani.

Known for his integrity that earned him respect in all walks of life, Khan could not convince the finance ministry to allocate resources for the smooth functioning of the commission, these sources said. It took him five to six months just to get an office and some staff.

Ironically, he has so far not even received the confirmation that his resignation has been accepted.

In 2009, according to reports at that time, influential and politically-connected sugar mill owners as well as hoarders sparked an artificial crisis, sending sugar prices soaring. An inquiry report prepared by the Competition Commission of Pakistan – the anti-competition watchdog – also established the existence of a cartel in the sugar industry.

The judicial commission was constituted in January 2011 after the ruling Pakistan Peoples Party (PPP) and the main opposition Pakistan Muslim League-Nawaz (PML-N) reached a consensus. Both the parties held negotiations on a 10-point economic reforms agenda, presented by the PML-N, and probe into the sugar scam was part of it.

However, the commission could not get funds or a designated bank account, which it said should be under the control of the finance ministry to ensure transparency. The money was needed to pay for travel expenses of witnesses coming from other cities to appear before the commission to record their statements.

Some officials attributed the fiasco to lack of interest from both the PPP and PML-N. The situation was further aggravated by sympathisers of the sugar mafia in government circles.

According to a notification issued by the law ministry, the commission was required to fix responsibility and recommend action against those responsible for omission and commission. It also had to recommend effective measures to prevent such incidents in future which involved corruption, corrupt practices, price hike, hoarding, scarcity, profiteering and heavy cost to poor people.

The commission started work in May-June last year and recorded statements of over two dozen witnesses. These witnesses were from Islamabad who did not require any travel allowance and a couple of volunteers came from Lahore and Karachi.

According to knowledgeable people, the witnesses helped the commission understand the working of the industry, but the body was nowhere near conclusion.

When it contacted people who had direct stakes in the sugar price scam, they asked their travel expenses should be borne by the commission, which according to the officials was a lawful demand.

Sources said the head of commission wrote many letters to the finance ministry, but it did not even respond to a single letter.

Ironically, when the commission was asking for funds, the finance ministry was busy in heavy spending. This was the year when the prime minister spent roughly Rs5 billion over and above his discretionary development budget and the government paid Rs45 billion in fertiliser subsidy.

Power sector subsidies, mainly on account of inefficiency and bad governance in power distribution companies, swallowed close to Rs500 billion that year.

Published in The Express Tribune, November 11^th, 2012.