Govt declares sugar inquiry report public

ISLAMABAD: Prime Minister Imran Khan on Thursday approved to make public the inquiry report of the sugar crisis inquiry commission after a special meeting of the federal cabinet.

The cabinet gave approval after the inquiry commission presented a forensic report on the sugar crisis in the federal cabinet session. Federal Investigation Agency (FIA) Director General Wajid Zia briefed the members of the cabinet on the report.

Special Assistant to the Prime minister on accountability Shahzad Akbar declared the findings of the inquiry report on the sugar crisis public.

Addressing a press conference alongside information minister Shibli Faraz, Akbar said that it was the first time that an independent inquiry has been conducted into the matter as promised by the prime minister. He said that today marks an important day as such investigations have not been conducted in the past, nor has any government had the courage to make the investigations public. 

Shahzad Akbar said the report found irregularities as it reveals that certain sugar mills used informal receipts. He said that mill owners conducted informal banking with the farmers. This affected farmers as it was an unregulated process, while mill owners received profits of up to 35 percent.

He disclosed that sugar mills owners pay an amount to sugarcane growers even less than the support price. In addition, all sugar mills make cuts in the weight of sugarcane from 15 to 30 percent.

He said that the sugar inquiry commission was set up because there has been a cycle of sugar price increases from December 2018 to August 2019, where prices were hiked up to 33% or Rs17 per kilogramme. Therefore, he said the prime minister set up a three-member inquiry committee under FIA DG Wajid Zia to present a detailed report regarding problems associated with the sugar industry that were causing price hikes.

He said that DG anti-corruption Punjab and one member each from Intelligence Bureau, Inter-Services Intelligence (ISI), Securities and Exchange Commission of Pakistan (SECP) and State Bank of Pakistan (SBP) were made part of the committee.

He said that the report is “very detailed” and acknowledged there will be many questions that will be answered. He added that the report will be available online shortly for anyone to read following the prime minister’s orders.

He said the audit of Alliance Sugar Mill from Rahim Yar Khan, partially owned by Pakistan Muslim League-Quaid (PML-Q) senior leader Moonis Elahi, showed that between 2014 to 2018, it made a systematic cut of 11 to 14 percent of the amount owed to the farmers, which equals to Rs 970 million.

He said the mill under-reported sugar sales for several years and sold sugar to unnamed buyers, he said, adding the inquiry report mentioned violations of the Pakistan Penal Code committed by the mills.

Mentioning the JDW Sugar Mills in which Jahangir Tareen owned 21 percent shares, he said according to the report, the mill’s management was involved in double booking, under-reporting and over-invoicing. It under-invoiced sales from bagasse and molasses, which resulted in 25 percent cost inflation.

He said the Al-Arabiya Sugar Mills owned by Salman Shehbaz Sharif was also audited and was found to be involved in a fraud of Rs 400 million through informal receipts and market manipulation.

Shahzad Akbar said the report revealed that certain sugar mills used informal receipts and it was ultimately the farmer who was crushed because there was no official record. The mill owners showed the price of production more than the support price which meant that farmers earned less than the support price.

He said the report revealed that the Omni Group in Sindh had specifically benefited from the subsidies given by Sindh Chief Minister Murad Ali Shah. The Omni Group was already receiving subsidies from the federal government but the Sindh government gave additional subsidy.