Friday March 01, 2024

‘Omni Group most beneficial group in 10 years’

Omni Group due to this political support was the only business group which remained single bidder in purchasing of three government sugar mills, one of federal and two of the provincial government and five sugar mills of private parties; this group also remained the major beneficiary of receiving of Rs1.76 billion in the head of ‘revival sick units’ by the Sindh government and receiving of subsidy of millions of rupees of sugarcane growers causing loss of billions of rupees to exchequer.

December 07, 2018

KARACHI: Omni Group under inquiry of mega money-laundering case remained most beneficial group in last 10 years due to alleged political backing, The News learnt.

According to the official documentary evidences available with The News, Omni Group due to this political support was the only business group which remained single bidder in purchasing of three government sugar mills, one of federal and two of the provincial government and five sugar mills of private parties; this group also remained the major beneficiary of receiving of Rs1.76 billion in the head of ‘revival sick units’ by the Sindh government and receiving of subsidy of millions of rupees of sugarcane growers causing loss of billions of rupees to exchequer.

Omni Group in this period also established one new Sakrand Sugar Mills. On the other hand, no other business group in whole period could establish any new unit of sugar nor could purchase any unit through official bidding or by any private party.

Alongside the purchase of three government Sugar Mills Omni Group in last 10 years of PPP-led government succeeded to get more five sugar mills Pangrio, Chambar; Khoski and Bawani of private parties majority of them through official assignee of Sindh High Court allegedly due to support of ruling party of province not upon private parties but upon all relevant official government departments, including official assignee and banks.

According to the official record available with The News, three sugar mills worth billions of rupees of government, Naudero Sugar Mills, Thatta Sugar Mills and Dadu Sugar Mills were purchased by Omni Group in last 10 years for around Rs300 million.

Five sugar mills of four private parties were also purchased allegedly through pressure of government; out of these four, two parties, one Mirza family, former owner of Pangrio Sugar Mills challenged the whole process in Sindh High Court while family of Syed Ghulam Mustafa Shah challenged the process in Sindh High Court and now in Supreme Court.

According to details, Pangrio Sugar Mills was purchased through official assignee of Sindh High Court; according to petition of Mirza family, the previous owners of Mill in Sindh High Court said unit was already encroached through police and private guards of a specific community; moreover allegedly in connivance with the former official assignee the asset of the company was undervalued at Rs400 million and shockingly the mill was sold off to Omni Group at a throwaway price of Rs175 million, causing loss to creditors and the general public who had invested in this public limited company.

According to a petition filed in Sindh High Court, Kanwal Mustafa Shah, major share-holder of ‘Larr Sugar Mills’ Sujawal, their mill along with 100-acre land was allegedly encroached by Omni Group through police and private guards and then ownership fraudulently changed in the name of Omni Group. Kanwal Mustafa Shah two weeks back also presented before Supreme Court bench headed by Chief Justice Saqib Nisar complained about alleged fraud. On the other hand, it was widely believed that Sugar Mills property of famous Bachani family of Tando Allahyar Chambar Sugar Mills was also got allegedly through pressure and there was also same story for two sugar mills of Dewan Group Khoski and Bawani by Omni Group but both the parties were silent on the issue.

Keeping focus only upon purchase of one government sugar mill The Dadu Sugar Mills it comes into knowledge that despite receiving a lowest bid of Rs400 million for the out-of-business Dadu Sugar Mills, the Sindh government, under influence and in violation of all formalities, sold the mill at a throw-away price of only Rs99 million to Naudero Sugar Mill Limited (property of Omni Group).

Interestingly, the industries and commerce department’s accounts reflect that the dates of auction of the mill fall in audit year 2011-2012. The Dadu Sugar Mill (DSM) was the property of Sindh Sugar Corporation Limited which was incorporated on July 21, 1976 with 100 percent equity of the Sindh government as an unlisted public limited company. The company took over the management of DSM from the former Board of Management.

The mill was established in the year 1977-78 with a cane crushing capacity of 2,800 tones per day (TCD). The mill, since its establishment, could not manage to cover its operational costs, sustaining massive losses.

In view of the situation, the industries department decided to dispose of the sugar mill through the Sindh Privatisation Commission in 2002. The corporation invited bids on 26th June, 2002 and 28th September, 2002 through national dailies. In response to the advertisement, an offer of Rs156 million was received which was much more or less equal to the assessed value of Rs465.273 million, according to an audit report. The efforts made by the commission could not yield tangible results and it was decided by the cabinet committee on privatisation in a meeting dated July 14, 2005 to liquidate the mill along with assets through the Sindh High Court. The official assignee was appointed through a court order dated September 8, 2006 with the directive to carry out liquidation of the Dadu Sugar Mill. The official assignee invited bids during the period January 10, 2007 to October 18, 2007. The highest bid received was Rs400 million against the assessed value, the report said.

The industries department moved the case to the competent authority on September 11, 2007 for decision and the same was approved that the highest bid of Rs400 million may be accepted without any conditions and any payment being made in installment. The decision; however, could not be materialised and the mill was not liquidated until May 2008.

On May 7, 2008, the official assignee was requested again to expedite the process of re-auctioning of assets of Dadu Sugar Mill.

The official assignee invited offers through various newspapers and the highest offer received was Rs400 million but the mill was sold for Rs90 million to the management of Naudero Sugar Mills Limited. This resulted in a gross loss of Rs375.273 million to the government.

The matter was reported to the department by Auditor General of Pakistan in December 2009 but no reply was furnished. However, in the department accounts committee meeting held on 2nd January, 2011, it was stated that the whole process was conducted by the official assignee of the Sindh High Court which remained cognizant of the facts that the competent authority accorded approval of the offer on 11th June, 2008. The reply of the management was not satisfactory as the mill was auctioned below the assessed value.

In this regard, Joint Investigation Team (JIT) constituted on Supreme Court orders for further probe in Sindh mega money-laundering case asked the Sindh government to provide complete record of subsidy given to sugar mills, auction details of Naudero Sugar Mills, Thatta Sugar Mills and Dadu Sugar Mills.

In a letter (copy available with The News), secretary of JIT asked Sindh chief secretary to direct the secretaries concerned of departments to appear before JIT along with the attested copies of all said record.

On the other hand, 90 percent financial assistance in the name of revival of sick industrial units was provided to Sakrand Sugar Mills, Chambar Sugar Mills, Fauji (Venus) Sugar Mills of Omni Group.

The fund of Rs2 billion was created by the Sindh government in annual budget for the revival of small and medium sick units in various industrial estates of Sindh province. Fund has to provide sick units through Sindh Bank.

The main object of this scheme was to restore the small and medium units in the interior especially rice husking mills, ginning factories and steel re-rolling mills.

According to the official figures of Industries Department, number of sick units in various estates of province is 1,198 and these four said units as the running profitable units are out of the official list. The majority of sick units lie in industrial estates in Kotri and Nooriabad of District Jamshoro and Korangi of Karachi. Most of such units are factories which wrapped up operations due to frequent power outages and gas load management and non-availability of water. Only in Nooriabad industrial estate, 36 units lie closed.

According to the details, Industries Department, Sindh on October 25, 2013 moved a summary to the Finance Department for the grant of financial assistance to the four big industrial units Sakrand Sugar Mills District Benazirabad (Nawabshah), Chambar Sugar Mills District Tando Allahyar, Fauji (Venus) Sugar Mills Tando Muhammad Khan owned by Omni Group and out of total amount Rs1.76 billion were given to Omni group. This scribe tried his best to approach any of responsible person of Omni Group but almost all directors were behind the bars or at large; however, close circles of Omni Group informed this scribe that there was no political support to Omni Group and the group received all sugar mills of government or of private parties through transparent manner and mainly through Sindh High ‘official assignee’ branch. These circles added that Group received subsidy for growers and all amount disbursed to growers and received amount for sick units purely on merit and Group is ready for any impartial inquiry of any investigation agency.

These circles added that Group has established many businesses and industrial units in Sindh province and boosted economy and provided many jobs to deserving qualified persons of the area, also worked in social sector too and hopefully Group will overcome all present hardships and restart its business activities with full spirit.