Information Minister Shibli Faraz and PM's aide on accountability, Shehzad Akbar, on Thursday revealed details from the Sugar Forensic Commission (SFC) constituted to find out those behind the sugar shortage and price hike of the commodity in the country earlier this year.
Akbar said the report revealed that the sugar mill owners were acting as "cartels". Six major groups hold 51 per cent of the production supply, he added.
"A mill called Alliance from Rahim Yar Khan — partially owned by Pakistan Muslim League Quaid (PML-Q) senior leader Moonis Elahi — was audited. It showed that between 2014 to 2018, 11-14pc systematic cut was done for farmers, which translated to Rs970 million and was a huge blow to them."
He added that the mill under-reported sugar sales "for years" and sold supply to unnamed buyers. The report mentioned violations of the Pakistan Penal Code, he said.
Akbar also mentioned the JDW sugar mill in which PTI stalwart Jahangir Tareen owned 21pc shares. He said that according to the report, the mill committed "double booking, under-reporting and over-invoicing".
"The report noted that the mill under-invoiced sales from bagasse and molasses which resulted in 25pc cost inflation. They also committed corporate fraud whereby money was transferred from their PLC to their private company.
"Forward sales, satta, benami sales have all been associated with JDW too."
The Al Arabiya mill owned by Salman Shahbaz Sharif was also audited, the SAPM said, adding that it was found to have committed fraud worth Rs400m through informal receipts and market manipulation.
Akbar said the report had proven what PM Imran Khan had always maintained.
"Whenever a businessman comes into politics, he will always do business even at the expense of the poor. So his [PM's] thinking has been validated. A certain business community has captured the market and as a result, people are suffering," he said.
He added that the report will be available online shortly for anyone to read following the prime minister's orders.
Akbar said that the report revealed that certain sugar mills used informal receipts. "It was ultimately the farmer who was crushed because there was no official record. The mill owners showed the price of production to be more than the support price which meant that farmers earned less."
He added that mill owners also conducted informal banking with the farmers which hurt the farmers because it was an unregulated process. This gave the mill owners a profit of up to 35 per cent, he said.
Akbar said that it was the first time that an "independent inquiry" has been conducted into the cost of production. "In 2017-18, sugar mills determined the cost of production at Rs51 per kilo whereas the report gave an estimate of Rs38 instead.
"In 2018-19, sugar mills gave cost price at Rs52.60 while the report gave an estimate of Rs40. [The sugar mill owners] purchased sugarcane at a lower price but showed a higher price in the invoices," he said.
The SAPM said that the report also pointed out that the sucrose content as shown by Pakistani mill owners (9.5pc to 10.5pc) was less than the international standard.
There are two injustices — inflated cost of production and market manipulation — which were being done with the country's people, according to the report, he said, adding that accounting fraud was also being committed by the sugar mill owners.
"The report also showed that mill owners are maintaining two account books. There is an under-reporting on sugar procurement of 25-30pc, which is an absolute scandal. Tax is not paid because of this."
Akbar said the report revealed that the Omni Group in Sindh had "specifically benefited" from the subsidies the Sindh government provided. He added that the report revealed Sindh Chief Minister Murad Ali Shah's name.
He questioned why the chief minister gave additional subsidies to the Omni Group as it was already getting subsidies from the federal government.
