Which dept will do what to fix sugar mafia

ISLAMABAD: Under the action plan announced by the government on Sunday to fix sugar mafia, seven federal and provincial institutions will initiate seven different types of criminal, regulatory and tax related proceedings against those identified in the sugar commission report.

The cabinet members in their press conference held on Sunday on the subject named former prime minister Shahid Khaqan Abbasi for facing NAB action on sugar subsidy issue. However, as per the sugar commission report Punjab Chief Minister Usman Buzdar, federal cabinet members Asad Umar, Razak Dawood and Arbab Shahzad will also be questioned by the Bureau on the issue of subsidy.

Sindh Chief Minister Murad Ali Shah and some other PPP leaders would also be questioned on the issue of subsidy.

Politicians owning those sugar mills, whose forensic audit has already been done, will also be questioned by NAB and other six institutions assigned different actions by the government. These politicians include Jehangir Tareen, Sharifs, Chaudhry Elahi family, brother of Khusro Bakhtyar and Asif Ali Zardari. The approved seven points action plan involves seven institutions including NAB, FIA, SECP, FBR, Competition Commission of Pakistan, SBP and provincial Anti-Corruption departments.

The Action Plan includes following seven points:

1. Sending a reference to NAB to investigate total of over Rs29 billion subsidy allocated and disbursed to sugar industry by provincial and federal government from last five years including subsidy given by PTI government under the timeline provided by National Accountability Ordinance. NAB would also be requested to probe the issue of subsidies given to the sugar industry from 1985 onwards and to initiate the criminal prosecution where evidence of misuse of authority related to subsidy issues are found.

2. The FBR is asked to investigate the income and sales tax related frauds, evasions and Benami transactions. The report found several tax fraudulent practices of sugar millers during investigation. The FBR is asked to submit the report within 90 days from the date of registration of inquiry through the Ministry of Finance.

3. The issues related to cartelisation and anti-competitive collusion in the sugar industry would be investigated by Competition Commission of Pakistan (CCP). The inquiry commission found that the CCP was cognised of the sugar cartel since 2009 and conducted a search of the Pakistan Sugar Mills Association (PSMA) office, declaring it a front-runner of the cartel but failed to take any action ever since. The action plan provided an opportunity to the CCP to establish its credibility and it has been asked to investigate the issues related to cartelisation and anti-competitive collusion highlighted in the report. The government also decided to appoint new members of the CCP within a week. The CCP is asked to submit its report within 90 days from the date of registration of inquiry.

4. The issues relating to export proceeds, loans defaults/ write-offs and sale of pledged stock are sent to the State Bank of Pakistan. The SBP is asked to submit the report within 90 days.

5. The sugar commission pointed out the corporate frauds committed by sugar mills through associated companies. For example, the JWD is alleged to have committed a corporate fraud of Rs3.6 billion through over-valued purchase of associated company JK Farming Systems Ltd and booking losses through it. The action plan referred further investigations of corporate frauds of sugar mills in the light of findings of the commission report to both Federal Investigation Agency (FIA) and Securities and Exchange Commission of Pakistan (SECP). Both the agencies are asked to submit their findings to the federal government within 90 days.

6. Potential issues of fake export of sugar to Afghanistan and money-laundering came forward during investigations of the inquiry commission are referred to FIA. The agency is asked to investigate various federal laws offenses relating to potentially fake exports to Afghanistan and money laundering through bulk cash transactions within 90 days.

7. The Sugar commission also found sugar millers involved in various offences under provincial laws such as payment to cane-growers below the support price and illegal deductions on account of weight of cane. The action plan referred all such potential offences to Anti-Corruption Establishments (ACE) of Punjab, KP and Sindh provinces for further investigations. The ACEs of the provinces will also submit their reports within 90 days.