• PM’s aide says govt will take on all mafias
• NAB, FIA, others tasked to take legal actions
• PML-N slams PTI for helping Tareen leave the country

ISLAMABAD: Prime Minister Imran Khan on Sunday approved massive investigations through various accountability organisations for taking action against the ‘sugar cartel’ allegedly involved in a multibillion rupee scam for the past 25 years.

At a joint press conference with Information Minister Shibli Faraz, Special Assistant to the Prime Minister on Accountability Shahzad Akbar said: “The government will take on all the mafias in the country one by one. Everyone will be held accountable, no matter how rich or politically powerful. No exceptions can be made.”

However, in a veiled reference to the ruling party’s stalwart Jahangir Tareen, the main opposition Pakistan Muslim League-Nawaz blamed the Pakistan Tehreek-i-Insaf government for helping the ‘ATM’ flee the country and questioned his ‘quiet’ departure despite being a prime suspect in the sugar scam.

The ‘sugar cartel’, which was allegedly involved in the shortage and price hike of the commodity, tax evasion, undue export subsidy for many years, will face the National Accountability Bureau (NAB), Federal Investigation Agency (FIA), Securities and Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), Federal Board of Revenue (FBR) and Competition Commission of Pakistan (CCP).

“Prime Minister Imran Khan in a meeting today approved investigation against the sugar mafia that benefited during the last 25 years in the country,” the PM’s special aide on accountability said, adding the premier was of the opinion that action should be taken against everyone involved in the scam irrespective of their status and political affiliation.

Actions against 88 sugar mills owners are expected in the light of recommendations of the recent Sugar Forensic Commission (SFC) report that exposed several bigwigs in the scam including Mr Tareen, a brother of federal minister Khusro Bakhtiar and sons of opposition leader in the National Assembly Shahbaz Sharif.

Any companies, Mr Akbar said, that had committed violations after getting subsidy would fall within the NAB’s jurisdiction. Subsidies given by the federal or provincial governments, including PTI government in Punjab, would be investigated, he added.

The PM’s aide said political families entered the sugar business in the 1990s and since then they have crushed everyone else in the industry. “A well-known family in the 1990s exported sugar to India. NAB will also investigate that case and in this regard, a reference will be drafted. Not only the nine mills that we have already mentioned were the beneficiaries but nearly all the 80 sugar mills,” he added.

Seven different investigations/actions would be conducted against sugar barons, he said, adding that NAB would investigate the Rs29 billion subsidies given to the sugar mills for export of sugar during the last five years. “It has been decided to take penal actions against sugar mill owners who violated the law, recover the looted money, and overhaul and reform the regulatory system,” he added.

The Federal Board of Revenue (FBR) would investigate sales tax fraud, mill owners showing reduced income and benami transactions of which the report had found evidence, he said, adding that it was directed to ensure that adjudication on cases and recoveries start within 90 days. “The FBR has also been directed to conduct forensic audit of all mills besides those mentioned in the report,” he added.

Mr Akbar said the third action the prime minister approved was investigation of cartelization by the CCP. “Sugar mills caused damage to the people and the CCP failed to check this in the past. A new team has been constituted that will submit a report within 90 days.”

The SBP, he said, would be directed to investigate the companies that showed fake exports and were involved in default of loans or sold pledged stocks. “The SBP will also submit a report to the finance ministry within 90 days and will mention companies and their frauds by name, besides imposing heavy fines on the violators,” he added.

Similarly, the Federal Investigation Agency (FIA) and Securities and Exchange Commission of Pakistan (SECP) would investigate corporate fraud, stock fraud, shareholder fraud and other types of corporate fraud such as underwriting would be investigated.

The FIA would also investigate the matter of fake exports to Afghanistan and money laundering. Mr Akbar said: “Every receipt will be checked and the FIA will file cases in the courts within 90 days against those who did this,” he announced.

The PM’s aide said an investigation would also be launched to find out where provincial laws were broken. “Sugar mill owners have enhanced their capacities without showing it officially to maximise profits. Most importantly, some mills did not pay farmers their dues on time, and showed more price on harvesting of sugarcane. This will be investigated by the anti-corruption units in Punjab, Khyber Pakhtunkhwa and Sindh,” he added.

The prime minister, he said, also expressed his desire for overhauling of the regulatory framework as the SFC had recommended extensive use of technology as a way forward. “This will lead to setting up of an online stock system and putting barcodes on sugar bags,” he added.

Under the PM’s directives, he said, a committee headed by Minister for Industries Hammad Azhar would be formed to determine the cost of production and set price of sugar.

Asked about the action being taken against Punjab Chief Minister Usman Buzdar for giving Rs3 billion subsidy to sugar mills in 2018-19, the PM’s aide on accountability said that the case would also be dealt by NAB.

The SFC was constituted by the government in the first week of April 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 commission’s report 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.

According to the report findings, mill owners and associates took yearly benefit of Rs100bn to Rs150bn due to unjustified export amid expected lower output and six groups were found as main beneficiaries of manipulation.

Speaking on the occasion, Information Minister Shibli Faraz said that many people had thought that no action would be taken against the sugar barons by the government, because there were some big names in the report, but accountability was the government’s first priority. “Farmers and common man would benefit from the action that would be taken and efforts would be made to retrieve the looted money,” he added.

The SFC report had detailed how over the years the sugar mill owners manipulated the market to make windfall profits amounting to billions of rupees. The report also listed the nexus between the owners and various government officials that led to unregulated practices, bypassing laws.

PML-N’s reaction

Shortly after the presser, PML-N spokesperson Marriyum Aurangzeb, in an apparent reference to PTI leader Jahangir Tareen, said the government officials were preaching accountability after helping the powerful “ATMs” flee the country.

She said she would urge PM Khan not to stage a drama after helping the powerful to fill their pockets. “Only Imran Khan sahib is involved in the sugar crisis. His house at Zaman Park was built using the money from cheeni chori,” she alleged.

Ms Marriyum said PM Khan and CM Buzdar should be held accountable before the people.

“The NAB-Niazi nexus will probe Imran’s theft, there is no bigger joke than this. Those who are risking the country’s future and economy are using the slogan of self-accountability,” she added.

Published in Dawn, June 8th, 2020