LAHORE: The Federal Investigation Agency (FIA) has detected Rs110 billion earning by the sugar mafia during the last one year through ‘speculative pricing’ and on Wednesday constituted 20 teams to lay hands on those involved in it.

Also in the day, the FIA anti-corruption circle registered an FIR against estranged PTI leader Jahangir Tareen’s JDW group and Gourmet Bakers & Sweets Pvt Ltd, Lahore, under sections 420, 468, 471 and 109 of the Pakistan Penal Code (PPC), read with sections 3/4 of Anti-Money Laundering Act 2010.

According to the FIR, during the course of inquiry against the sugar mafia, “it has transpired that sugar industry barons, sugar-brokers & their satta-agents (speculative pricing players), in active connivance with sugar-mills, have transformed into a clandestine sugar satta-mafia and are operating in a collusive but secret-mode, especially through electronic means/ WhatsApp groups to dishonestly and fraudulently maneuver, manipulate and artificially hike sugar prices, amidst hoax of impending sugar-stocks shortages (while sugar-stocks are lying ‘unsold’ or ‘sold/un-lifted’ in mills & godowns and demand-supply gap is artificial)”.

The inquiry reveals “the satta-mafia had already fraudulently ramped-up the (speculative) ex-mill price by Rs20/kg in last one year (from Rs70/kg on Feb 11, 2020 to Rs90 per kg on March 21, 2021; they are now conspiring to pump it upwards of Rs110 per kg in Ramzan.”

During the inquiry it was revealed that “even the leading registered businesses in the country, like Gourmet Bakers & Sweets Pvt Ltd Lahore, are being facilitated by satta-mafia agents to commit huge accounting & tax-frauds in a very organized manner by concealing their actual sugar consumption & consequently business turnover.”

The FIR says Malik Abad Ali (speculative pricing player) was intercepted and interrogated. “Digital evidence (two smartphones & one HDD), one ledger pertaining to satta (speculatively pricing) and 45 miscellaneous ledgers were taken into custody through seizure memo. Review of manual ledgers and communication on digital media (cyber forensic-analysis to retrieve any deleted data is underway) seized from Malik Abad Ali revealed that innumerable secret WhatsApp Satta Groups were being operated by the Satta Mafia. Examination of seized digital media (cyber forensic-analysis underway), ledgers and on-spot interrogation of Malik Abad Ali (key satta-player) during search & seizure also revealed clearly that he was one of the main satta players actively involved in sugar satta, in connivance with and on behalf of various sugar-industry barons and others. He also works in active connivance with JDW Sugar Group but also works for Ashraf, Sheikhoo and other sugar-mills. He operates in WhatsApp Satta Groups through front-men/ other satta-agents Sajid Ali s/o Maqbool Hussain and Asad Pervaiz Butt s/o Khalid Pervaiz Butt.”

The FIR says as Malik Abad Ali has also been abetted and assisted by owners and officials of various sugar mills, their role may be ascertained during the course of investigation.

“Action is being taken against major sugar groups, including those led by Jahangir Tareen and Opposition Leader in Punjab Assembly Hamza Shehbaz, under speculative pricing, money laundering and other charges,” an official told Dawn.

The FIA Lahore has been conducting an investigation into the multi-billion sugar scam since last year.

“The sugar mafia has made Rs110bn in one year in speculative pricing and to hide this income a number of secret and fake bank accounts were opened,” the official said.

He further said the FIA had taken 32 mobile phones and laptops in possession from some ‘sugar pricing players’ and collected relevant evidence against the major groups. “There were reports that the sugar mafia wanted to further increase sugar price during Ramazan,” he said.

The FIA Lahore in November last had registered cases against Jahangir Tareen, his son Ali Tareen, PML-N resident Shehbaz Sharif, his sons Hamza and Suleman and others in the sugar scam under money laundering, fraud and other charges.

An FIR was registered against Jahangir Tareen and Ali Tareen under sections 406 (criminal breach of trust), 420 (cheating of public shareholders) and 109 of the Pakistan Penal Code (PPC), read with section 3/4 of Anti Money Laundering Act.

Shehbaz Sharif, Hamza and Suleman were booked under sections 419, 420, 468, 471, 34 and 109 (financial fraud, impersonation and forgery) of the PPC and 5(2) and 5(3) (criminal misconduct) of Prevention of Corruption Act, read with section 3/4 of Anti Money Laundering Act.

The FIA had recorded statement of Hamza while Suleman is absconding in the UK. Tareen’s lawyer had responded to the FIA’s queries.

The FIR says during the course of inquiry, it was noted that an amount of at least Rs1.2bn was overpaid (transferred by Jahangir Tareen) from the accounts of a listed public limited company (JDW Sugar Mills Ltd) to another company (JK Forming System Ltd, hereinafter JKFSL, owned by his children) while buying the assets of the latter (JKFSL) at an exorbitant non-arm’s length purchase price of Rs4.35bn in November 2013. “During the course of present inquiry, it has transpired that the JDW Sugar Mills recorded a false disclosure in its annual audited financial statement of 2014,” it says.

A separate FIR against Shehbaz Sharif, Hamza and Suleman says during the course of the FIA inquiry, it was learnt that total deposits amounting to over Rs25bn (2008-18), identified so far, were received in bank accounts of various low-wage employees of Ramzan Sugar Mills and Al-Arabia Sugar Mills and accounts of fake companies set up and controlled by the Sharif group.

“The low-wage employees of the Sharif group’s Ramzan Sugar Mills and Al-Arabia Sugar Mills have admitted during the inquiry that these accounts were opened and operated for the personal/secret transactions of Suleman Shehbaz on the instruction of CFO of the Sharif group Mohammad Usman. Mushtaq Cheeni has provided secret ledgers as a proof to show that the money from undisclosed sale of sugar deposited into these accounts is only Rs3.95bn implying therein that the source of remaining funds is extraneous to sugar business and can best be explained by Shehbaz Sharif and his sons and officers of their mills who managed these accounts,” the FIR says.

It further says the inquiry has demonstrated that Shehbaz Sharif aided and abetted by his sons Hamza and Salman has been found to be involved in amassing wealth (pecuniary resources) disproportionate to their known sources of income.

Published in Dawn, March 25th, 2021