Default on dues, unlawful price hike: Punjab govt cracks down on five sugar mills

LAHORE: The Punjab government has arrested the owners and senior management of five sugar mills for not making payments to the growers and unlawfully increasing the commodity price.

As per the latest information available with this reporter, the government cracked down on five defaulter sugar mills — including two units of Tandliawala Sugar Mills, Chanar Sugar Mills, Pasrur Sugar Mills and Shakar Ganj Sugar Mills — and arrested the owners and senior management.

The main allegations are default on payment of over Rs1 billion rupees dues to the farmers and selling sugar at higher than the government fixed rates.

Out of the total payable amount of over Rs1 bn, Rs620 million worth of payments were due on account of farmers outstanding dues, while a couple of other mills are involved in misdeclaration/fraudulent practices leading to about Rs400 million payables.

According to a senior official of the Punjab Food Department, despite several reminders, the managements of Chanar Sugar Mills and Pasrur Sugar Mills were reluctant to share the evidence of payment to growers and claimed that all amounts had been paid to the growers. However, as per record available with many farmers, they were yet to be disbursed return of their produce by these mills.

Hence, the department took action over incorrect/fraudulent practices against the sugar mills.

A senior official of the Food Department told this reporter that Javed Kiani, the owner of Chanar Sugar Mill, and three admin and finance executives of Shakar Ganj Sugar Mill, Jhang had been arrested over non-payment of dues.

A case against owner Ali Saleem had also been registered but his arrest could not be effected. AC Jhang is complainant in the FIR.

Action has also been taken against the manager admin of Tandliawala besides registration of a case against Haroon Akhtar on the complaint of AC Tandliawala.

Moreover, a case against Pasroor Sugar Mills has been registered by the Sialkot district administration. The owner, Ahmad Latif, has absconded.

The official said the outstanding dues of farmers should have been paid in a fortnight as per law, but the managements of various sugar mills were wilfully involved in default.

He said the government had issued several notices for recovery of farmer dues during the last one year, but to no avail. As a last resort, the provincial government, on the directions of the federal government, decided to take legal steps against the defaulting sugar mills a few weeks before the launch of the crushing season.

When contacted, Zaman Wattoo, Punjab Sugarcane Commissioner, said the government had used all available options for recovering over Rs1 dues of farmers.

“We reminded the mills managements of their financial commitments besides issuing notices to them, but all these efforts proved unsuccessful. So much so, the managements of a couple of sugar mills falsely declared that they had paid all dues to the farmers.

Meanwhile, according to an earlier statement issued by the chief secretary, the provincial government had initiated a stern action against the sugar mills for committing violation of the law and confirmed registration of cases against the owners and management of three mills - Chanar Sugar Mills Faisalabad, Shakar Ganj Sugar Mills Jhang and Pasrur Sugar Mills Gujranwala.

It said Chanar Sugar Mills owner Javed Kiani, Shakar Ganj Sugar Mills owner Pervez Ahmed, General Manager (Cane) Manzoor Hussain Malik and General Manager (Admin) Hussain Malik had been arrested while the police were conducting raids to nab the owner of Pasrur Sugar Mills.

Chief Secretary Kamran Ali Afzal said violators of the law would be dealt with an iron hand.

He said a strict action would be taken in case of sale of sugar at more than the fixed price and nobody would be allowed to sell the sweetener higher than the ex-mill rate of Rs84.75 and retail price of Rs89.75 per kilogram.

The Pakistan Sugar Mills Association (PSMA) condemned the arrest of millers and expressed its inability to start the crushing season in what it called the ‘prevalent circumstances’.

“We strongly condemn arrest of the sugar mill owners and other senior management. This is not the way to deal with representatives of the industry. The incumbent government has signaled a very negative message to industry and businesses. We want to run the industry in a professional manner while working with the government departments. However, the anti-industry policies of the government pushed us into a deep crisis, making it impossible for us to start the crushing season in prevalent circumstances,” said Ch Zaka Ashraf, central Chairman PSMA; Chaudhry Aslam, Chairman PSMA Punjab; Chaudhry Muhammad Waheed, Senior Executive Member; and others while addressing a press conference.

“We don’t want to observe a strike rather we need to operationalize sugar mills, as Rs500 billion worth of sugarcane is required to be bought and converted into sugar for consumers. However, the government should take corrective measures to address our concerns in order to create a conducive environment for the industry,” they opined.

Insisting that the sugar mill owners were not part of the mafia, the PSMA leadership lamented that false allegations were being levelled against them.

They also announced boycott of Saturday’s meeting of Sugarcane Control Board convened by the provincial government to discuss the price of sugarcane for the upcoming season and other issues.

They were of the view that at present, the government was reluctant to give NOC to sugar mills despite the fact that the mills had cleared all the dues.

They said delay in NOC had prompted the banks to raise objections on giving working capital to sugar mills and if the mills did not secure the working capital on time, then payment to farmers will become difficult.