Explosive sugar inquiry report made public by the Govt

The government directed the Federal Board of Revenue, Securities and Exchange Commission of Pakistan and the Federal Investigation Agency to launch an investigation against sugar mills based on the Sugar Inquiry Commission report.

The directions to launch an investigation come after the Sugar Inquiry Commission report released last month had laid bare some startling revelations about how the prices of sugar are fixed, how exports of the commodity are faked to avail rebates on sales taxes, and how billions of rupees are overcharged by sugar mills owners.

The federal government further said that a report on the investigation should be submitted within 90 days.

Special Assistant to the Prime Minister on Accountability and Interior, Shahzad Akbar, has written to the governor of the State Bank of Pakistan, Competition Commission of Pakistan and three provinces in this regard on the directions of the prime minister.

Moreover, the National Accountability Bureau has been ordered to conduct an audit of all sugar mills in the country.

On June 10, while briefing the media about the steps approved by the prime minister, Akbar had said that the "sugar mafia" was very powerful and has connections within departments but the government is committed to taking the matter to its logical conclusion.

“The action plan has been prepared in the light of recommendations given by the inquiry commission,” he had said, adding that “some individuals have been named in the sugar scandal.”

Sugar Inquiry Commission's report'

The Sugar Inquiry Commission report had laid bare some startling revelations regarding how the price of sugar is fixed and how billions of rupees are overcharged by sugar mills owners.

According to sources, the report mentioned in depth how the amount of sugar exported to Afghanistan is routinely inflated to show as if 75 tonnes of the commodity were being exported per truck.

However, this is barely possible, given that the maximum capacity of a truck, even when overloaded, does not exceed 30 tonnes.

The scam also seemingly has another purpose: laundering money. If sugar is being exported to Afghanistan, the payment should also be coming in from the same country.

However, it was found by the commission that many sugar mill owners were receiving telegraphic transfers for payments for sugar sold to Afghanistan from the US and Dubai, therefore seemingly whitening money and earning dollars at the same time.

Another important finding highlighted in the report is that sugar mills paid an estimated Rs22bn in taxes to the Government of Pakistan, but out of that total amount, Rs12bn was reclaimed in rebates. Hence, the net contribution was close to around Rs10bn.