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March 30, 2020

Sugar scam: Wider scope of probe to hinder fixing guilty

National

March 30, 2020

ISLAMABAD: Even after conversion of sugar probe into formal Commission of Inquiry under Act of Parliament by the government, the scope of Inquiry Commission has been expanded to 17 points where it will be hard to fix those responsible for the alleged scam.

At a time when the CONVID-19 outbreak has gripped the country, the sugar scam has disappeared from the national debate. However, sugar continues to sell dearer on the domestic market crossing Rs90 per kg in different parts of the country from earlier price of Rs85 per kg.

Director General FIA Wajd Zia heads the Commission of Inquiry.

Prime Minister Imran Khan had ordered an inquiry into the alleged scam to ascertain reasons and fix responsibility for the increased prices.

The government has now converted it into a formal Commission of Inquiry under Act of Parliament 2017 in order to expand its powers.

The Commission of Inquiry possesses powers of entry and search into a building or place where the Commission has reason to believe that any books of account or other document relating to subject matter of the inquiry may be found; and may seize any such books of account or take extra copies therefrom, subject to provision of 102 and Section 103 CrPC in so far as may be applicable.

Federal Minister for Planning and Development Asad Umar was asked around 10 days ago about the reason for converting the sugar probe into Commission of Inquiry, he replied that it was meant to grant powers to the commission.

The commission has been given mandate to undertake verification of sugar related issues from October 1, 2017 to September 30, 2019.

This reporter sent out questions to Wajid Zia on March 19, 2020 and waited for reply till Sunday but got no reply. On Sunday, the question was resent but there was no reply till the filing of this report in the evening.

Some ministries’ officials, who appeared before the commission, confided to this reporter that the economic rationale of sugar industry allegedly showed tendency towards cartelization because during this period of inquiry there was no increase in input cost and secondly despite having efficient mills the prices were fixed collectively.

The Terms of Reference (ToRs) of the commission expanded up to 17 points for probe and many believe that with such wide scope for investigation it would be quite hard to fix those basically responsible for the scam.

The ToRs included (a) whether the production, this year, was low as compared to past years? Was low production the primary reason for increase in prices?

(b) Was the minimum support price sufficient?

(c) Did the Mills purchase sugarcane at exorbitantly higher prices than the minimum support price? lf yes, then reasons thereof;

(d) Reasons for mills not purchasing sugarcane, for a limited period of a few weeks, from the farmers and its impact, if any, on sugar prices;

(e) Basis for determination of Ex-Mill price? Reasons for increase in Ex-Mill price;

(f) Market manipulation/cartelization by sugar mills, if any;

(g) Impact of forward contracts on the prices of sugar and whether any mala fide is involved;

(h) Whether margins between Ex-Mill and retail prices increased, compared to previous years, or otherwise. If yes, reasons thereof and potential beneficiaries;

(i) Impact of tax increase on sugar prices at Ex-Mill/Retail level;

(j) Hoarding at broker / whole-sale level and within sugar mills vis- à-vis stocks of last year;

(k) Reasons for sugar mills procuring sugar from other mills.

(l) Was export of sugar justified? Any subsidy given on export and its impact, with potential beneficiaries;

(m) Basis for determination of retail price of sugar;

(n) Role of Various stakeholders, including government institution and private sector in increase in sugar prices, including in sugar timely/ preventive/ pre-emptive remedial measures to Control sugar prices and mala fide, if any, of any stakeholder; and,

(o) Any other issue, deemed appropriate, related to the increase in recent sugar prices,

(p) Fix responsibility, if any, on any individual/officer/organization, including any purported benefit to a private party, besides suggesting a way forward for future course of action.

(q) Off-book transactions - type and nature (undocumented sales, forward contracts, agreements, pledging), individuals involved and kerb market – mechanics.