ISLAMABAD: The National Accountability Bureau (NAB) on Friday finally started an investigation into the sugar scam after the Supreme Court suspended the recent Sindh High Court (SHC) order that had nullified the sugar inquiry commission’s report.

NAB Chairman Javed Iqbal, Deputy Chairman Hussain Asghar, Prosecutor General Accountability Syed Asghar Haider, DG (Operations) Zahir Shah and Rawalpindi DG of the bureau Irfan Naeem Mangi reviewed details of the 2019 sugar scam and ordered the investigation at a meeting.

The Supreme Court on Sept 2 temporarily suspended the SHC’s verdict that had declared the constitution of the sugar inquiry commission illegal and rejected the move to get stay on the sugar panel report. “Following the verdict of the apex court, the anti-graft watchdog has started its work to probe into the scam,” said a source in the anti-graft watchdog.

The NAB meeting was apprised that a departmental Combined Investigation Team (CIT) had been formed to investigate the scandal. “The CIT will review in detail the sugar scandal, sugar subsidy and conduct transparent investigation into the scam,” said an official press release issued by the NAB headquarters.

Panamagate-fame Mangi to head CIT

The CIT comprises financial experts, legal consultants, sugar experts, forensic experts and case officer/directors, besides two investigation officers. Rawalpindi NAB DG, Mr Mangi, will supervise the CIT while NAB chairman, deputy chairman and prosecutor general will review progress on a monthly basis.

The press release said the CIT would collect details of sugar subsidy from all provinces.

The investigation team would also seek information from Security Exchange Commission of Pakistan (SECP) regarding financial audits of sugar mills and companies.

The NAB chairman ordered that investigation into sugar subsidy be conducted in a transparent and professional manner and all relevant departments be given full opportunity to defend themselves. “Every person who had availed sugar subsidy through non-transparent manner should be taken to task,” said the NAB chairman.

Under the action matrix, different departments have been given tasks to probe into the scam through different angles and aspects.

The CIT head, Mr Mangi, is also supervising an investigation into fake accounts case against ex-president and PPP leader Asif Ali Zardari. He was also a member of the Joint Investigation Team (JIT) that probed into the Panamagate scandal, which resulted in the ousting of the then premier Nawaz Sharif.

The sources said the CIT would seek record from all relevant departments regarding export subsidy on sugar. The investigation team may also summon and question owners of sugar mills, disgruntled leader of ruling Pakistan Tehreek-i-Insaf (PTI) Jehangir Tareen, sons of opposition leader Shahbaz Sharif and PPP leaders.

The forensic audit report of sugar inquiry commission, which was made public on May 21 some two months after the FIA had submitted a report of investigations into the 2019 sugar scam, had exposed over Rs150 billion fraud in production, sale and export of the commodity every year by sugar barons including Mr Tareen, a brother of sitting federal minister Khusro Bakhtiar, a leader of PTI’s ally Pakistan Muslim League-Q (PML-Q), Monis Elahi, and the sons of Pakistan Muslim League-Nawaz president.

The report revealed how “sugar cartel” in the country comprising 88 mills, in collaboration with some government departments CCP, FBR, Sugar Advisory Board and others cheated sugarcane growers and later common man right from the start of procurement of cane, manufacturing of sugar, sale in the local market, export subsidy and billions of rupees tax evasion.

Six groups of sugar mills were said to be the main beneficiary in the scam. They are RYK Group owned by Monis Elahi and Umar Shehryar; JDW Group owned by Jehangir Tareen, his son Ali Khan Tareen and Ahmed Ali; Sharif Group owned by Salman Shahbaz and Hamza Shahbaz; Hunza Group; Fatima Group; Al-Moiz Group and Omni Group.

The report said the groups were also major beneficiaries of Rs29 billion federal export subsidy since 2015, as RYK received subsidy of Rs3.94bn, JDW Rs3.05bn, Hunza Rs2.87bn, Fatima Group Rs2.3bn, Sharif Group Rs1.47bn, Al-Moiz Rs1.45bn and Omni Group Rs0.9bn.

The federal government later on July 28 directed relevant authorities to launch a massive crackdown against sugar barons and submit their reports in next 90 days.

Subsequently, Adviser to the Prime Minister on Accountability and Interior Mirza Shahzad Akbar after seeking consent of PM Khan wrote separate letters to the State Bank of Pakistan (SBP), Competition Commission of Pakistan (CCP), chief secretaries of Punjab, Khyber Pakhtunkhwa and Sindh, asking them to launch a crackdown against the sugar mafia in the light of the forensic audit report. The sugar inquiry commission report was also annexed with the letters.

The Federal Board of Revenue (FBR) was directed to conduct an audit of all sugar mills across the country to investigate matters related to benami accounts, dubious transactions and tax evasion.

A letter had been sent to the National Accountability Bureau (NAB) for fixing responsibility on sugar barons according to the sugar commission report. The watchdog was also tasked to analyse the aspects of export subsidies given to the sugar mill owners against the law.

The SBP governor was asked to investigate sugar mills’ loans and dubious exports and submit a comprehensive report. The Federal Investigation Agency (FIA) and SECP were tasked to probe corporate fraud and the export issue of sugar mills.

Published in Dawn, September 12th, 2020