Penalty worth Rs44-billion imposed on Pakistan Sugar Mills Association

A penalty worth Rss44 billion was issued to the Pakistan Sugar Mills Association (PSMA) by the Competition Commission of Pakistan (CCP) for fixing sugar prices.

A statement issued by the CCP on Friday obliged the PSMA to pay the penalty within two months.

According to the statement, the decision to impose the penalty on the PMSA was taken over a violation of the Competition Act 2010 for fixing the sugar price.

The "violation" was proved during an investigation conducted by the CCP, read the statement.

It said that the sugar mills, under the PSMA, obtained the quota of utility stores and imported sugar through a nexus.

The notification further stated that two of the CCP members gave a dissenting opinion over the commission’s decision, whereas the chairman and another member voted for issuing a penalty to the PSMA.

However, the CCP chairman voted again in favour of the decision over a tie in the votes.

The penalty issued to the PSMA is the highest penalty ever imposed by the CCP.

Last year, a sugar crisis had occurred in the country, due to which the sugar prices had skyrocketed. The CCP investigated the matter and issued notices to several sugar mills.

Once the Sugar Inquiry Commission submitted its report, the CCP was asked to investigate the issues related to cartelisation and anti-competitive measures in the sugar industry.

PSMA rejects inquiry commission’s report

On the other hand, the PSMA outrightly rejected the inquiry commission’s report, which was made public and explained how the price of sugar was fixed, how exports of the commodity were faked on sales taxes, and how billions of rupees were overcharged by sugar mills owners.

The PSMA alleged that the commission "distorted the facts" in its report presented to Prime Minister Imran Khan and the federal government.

What did the SIC report suggest?

The SIC report had made some shocking revelations, according to which many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the United States and the United Arab Emirates, therefore, seemingly whitening money and earning dollars at the same time.