Certain business community captured sugar market compelling people to suffer, says Akbar

• SAPM says Omni Group, Murad Ali Shah, Moonis Elahi, Jahangir Tareen, Salman Shehbaz and others involved in the sugar scam.
• The mill owners showed the price of production to be more than the support price which meant that farmers earned less, says Shehzad Akbar.
• Sugar mill owners are also involved in accounting fraud: Akbar.

(Karachi) Special Assistant to Prime Minister on Accountability Shehzad Akbar said the Sugar Inquiry Commission report has transpired that a certain business community has captured the market compelling people to suffer.

Highlighting details of the inquiry commission report at a press conference in Islamabad on Thursday, he said farmers faced losses at the hands of businessmen and middleman. He added farmers were not given their due share while sugar was sold at higher rates.

Akbar pointed out that in 2017-18, sugar mills determined the cost of production at Rs51 per kilogramme whereas the report gave an estimate of Rs38 per kilogramme. Similarly, he stated in 2018-19, sugar mills gave cost price at Rs52.60 while the report gave an estimate of Rs40. "The sugar mill owners purchased sugarcane at a lower price but showed a higher price in the invoices," he revealed.

He said the findings revealed that certain sugar mills used informal receipts. "It was the farmer who was badly affected because there was no official record." He said, "The mill owners showed the price of production to be more than the support price which meant that farmers earned less."

In addition, he transpired that sugar mill owners carried out informal banking, which is an unregulated procedure and resulting in losses to the farmers. "By this method, mill owners gained a profit of up to 35 percent," the SAPM said.

The special assistant said the sugar mill owners are also involved in accounting fraud. "The report transpired that mill owners are maintaining two account books. There is an under-reporting on sugar procurement of 25 to 30 percent, which is a scandal. Tax is not paid because of this," he said.

He said the report revealed that the Omni Group in Sindh had benefited from the subsidies the Sindh government provided. He added that the report held Sindh Chief Minister Murad Ali Shah responsible in the scam.

Besides, he said a mill called Alliance from Rahim Yar Khan, which is partially owned by Pakistan Muslim League Quaid senior leader Moonis Elahi, was audited. It showed that between 2014 to 2018, 11-14 percent systematic cut was done for farmers, which translated to Rs970 million.

He further stated that the mill over-reported the production cost for several years and sold supply to unnamed buyers. The report mentioned violations of the Pakistan Penal Code, he said.

He said JDW sugar mill in which Jahangir Tareen owned 21 percent shares committed double booking, under-reporting and over-invoicing. "The report noted that the mill under-invoiced sales from bagasse and molasses which resulted in 25 percent cost inflation. They also committed corporate fraud whereby money was transferred from their PLC to their private company."

The SAPM revealed that  Al Arabiya mill owned by Salman Shahbaz Sharif was also audited and it was found to have committed fraud worth Rs400 million through informal receipts and market manipulation.

Akbar elaborated that sugar mill owners were acting as mafia and six major groups hold 51 percent of the total sugar production. "Whenever a businessman comes into politics, he will always do business even at the expense of the poor. So PM's thinking has been validated," he said.

He added that the report will be available online shortly for anyone to read following the prime minister's orders.

Earlier, the PM constituted Sugar Forensic Commission to find out those behind the sugar shortage and price hike of the commodity in the country.

The sugar inquiry report revealed names of many influential people who allegedly benefitted from the crisis.