Sugar crisis: Court permits govt to take action over sugar inquiry commission report

ISLAMABAD: The Islamabad High Court (IHC) on Saturday dismissed a petition filed by the Pakistan Sugar Mills Association (PSMA) seeking an extension of the stay order earlier given after the release of the sugar inquiry report.

Earlier, Chief Justice Islamabad High Court, Athar Minallah had granted a stay order against the recommendation of the inquiry commission on the sugar scam that has called for registration of criminal cases against sugar mill owners.

The appeal was filed in IHC by the leading sugar mill owners, including PTI leader Jahangir Khan Tareen, opposition leader Shehbaz Sharif and federal minister Khurso Bakhtiar. They had challenged the formation of the probe commission, and its findings in the court.

The commission, in its report, had accused the millers of earning illegal profits amounting to billions of rupees through unjustified price hikes, ‘benami’ transactions, tax evasion, suspicious sugar export deals, illegal power production, misuse of subsidy and purchasing sugarcane off the books.

Today, in its short order issued after Attorney General Khalid Jawed Khan concluded his arguments, the court disposed of the petition and ruled that the formation of the inquiry panel was legal.

The order also said that the federal cabinet could not under the Consitution delegate functions and powers vested in the federal government, as had been previously decided by the Supreme Court.

In light of this, the federal cabinet’s decision to delegate power to Special Assistant to Prime Minister on Accountability Shahzad Akbar was not in accordance with the law laid down by the Supreme Court, it added.

The federal government had the power to send a reference to the National Accountability Bureau (NAB) under the National Accountability Ordinance, 1999, the court noted.

شکر الحمد اللہ عمران خان ایک بار پھر سرخرو ہوئے۔ عدالت نے شوگر رپورٹ پر حکم امتناعی خارج کر دیا۔ کپتان ڈٹ کر کھڑا ہے اور انشاللہ اس کام کومنطقی انجام تک پہنچائے گا۔پاکستان میں بہت کچھ پہلی بار ہو رہا ہے کیوں کہ کرسی پر خان بیٹھا ہے ! کوئی عوام کے مفاد کا سوداگر یا سودے باز نہیں

— Dr. Shahbaz GiLL (@SHABAZGIL) June 20, 2020

Sugar inquiry report

In the first week of April, the sugar inquiry commission had been constituted by the government following the release of two separate inquiry reports of the FIA on the issue of artificial shortage of sugar and wheat in the country and sudden increase in their prices last year.

The report had revealed that certain sugar mills used informal receipts. Sugar 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.

It further 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.

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, the report added.

Mentioning the JDW Sugar Mills in which Jahangir Tareen owned 21 percent shares, 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.

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.

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, according to the report.