The Sindh High Court (SHC) on Monday declared the constitution of the sugar inquiry commission — formed to probe the recent crisis of the commodity in the country — and its report illegal.

The court directed the National Accountability Bureau (NAB), the Federal Investigation Agency (FIA) and the Federal Board of Revenue (FBR) to conduct separate and independent investigations into the crisis.

The written verdict was issued by a division bench headed by Justice K. K. Agha while hearing a set of petitions filed by sugar mils in Sindh.

On June 23, Mirpurkhas Sugar Mills and around 19 other mills in the province had moved the SHC against the report of the inquiry commission and pleaded to quash the report.

The petitioners had contended that the commission was not constituted in accordance with the relevant law and included members who had already made up their minds against the sugar mills as they were also members of an earlier inquiry committee constituted for the same purpose.

In the written order issued today, the SHC listed eight reasons for quashing the report, including the "failure to follow mandatory rules of business" and "the failure to gazette the notification of the commission within due time".

The court stated that the commission's constitution was "incomplete", "biased" and denied the petitioners the opportunity to be heard.

The SHC also noted the "prejudice caused to the petitioners by the report, the action plan and letters which were sent by the adviser on accountability and interior to various statutory bodies and violation and interference in the relevant schemes of law and the Constitution by the executive".

"We hereby declare the impugned notification of March 16, 2020 and the impugned report of May 21, 2020 and all subsequent and consequent orders of the respondents [...] to be without lawful authority and of no legal effect, with regard to the petitioners, and quash the impugned report and all such actions and orders."

The SHC also stopped the federal government and all other government departments from directly or indirectly taking any action based on the findings of the report.

The court directed the NAB chairman to open an independent inquiry under the National Accountability Ordinance (NAO) to determine if any acts of corruption had been committed by any of the petitioners, without the reference of the report.

Further, it asked the FBR chairman to open an independent inquiry in accordance with the relevant tax laws to determine whether any "illegality" had been committed by any of the petitioners, without the reference of the report.

Similarly, the high court asked the director of the FIA to also conduct an independent inquiry under the Anti-Money Laundering Act, 2010 to determine if money laundering had been committed by any of the petitioners, without the reference of the report.

It also directed the Competition Commission of Pakistan (CCP), the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) to "fulfil their respective mandates in accordance with the law, with respect to the petitioners and the sugar industry".

The court also directed that copies of the order be forwarded to the NAB chairman, the FBR chairman, the FIA director general, the CCP chairman, the SECP chairman, the SBP governor and the Sindh chief secretary.

Meanwhile, Attorney General Khalid Jawed Khan said that the government will approach the Supreme Court against the high court's judgement.

Govt orders formal investigations against 'sugar cartel'

On July 28, the federal government had ordered the relevant departments to launch formal investigations in light of the report and where necessary take "penal, corrective and mitigating measures" against the "sugar cartel" implicated in the commission's report.

Adviser to the Prime Minister on Accountability and Interior Shahzad Akbar had written letters to CCP, Sindh chief secretary, Punjab chief secretary, SBP, FIA, SECP and FBR to "undertake a comprehensive investigation" into the matter.

All recipients of the letters, barring the chief secretaries of Sindh and Punjab, were directed to wrap up the investigation and submit a report to the federal government within 90 days.

Sugar probe report

The sugar inquiry commission, which was headed by FIA chief Wajid Zia and included officials from other institutions, was set up on the orders of Prime Minister Imran Khan to investigate the reasons behind the soaring price and shortage of the commodity in the country.

The commission's report, which was made public by the government in April, exposed multiple wrongdoings within the sugar industry and implicated key government and opposition political figures, including PTI leader Jahangir Tareen, PML-Q MNA Moonis Elahi, federal minister Khusro Bakhtiar and PML-N President Shahbaz Sharif's son.

The report detailed how over the years sugar mill owners had manipulated the market to make windfall profits amounting to billions of rupees, shedding light on the nexus between these owners and various government officials that led to unregulated practises bypassing laws and often exploiting the farmers.

It also revealed how the ‘sugar cartel’ comprising 88 mills had cheated sugarcane growers and consumers at every step starting from the procurement of cane, production of sugar, sale in the local market and export, all of which led to price hike of sugar as well as billions of rupees of tax evasion.