Accused roam free as sugar scam probe hangs in balance

LAHORE: Over a year and a half has passed since the start of high level investigations into the infamous sugar scandal – one of the biggest scams in the three-year tenure of Pakistan Tehreek-e-Insaf (PTI) government – but not a single person among the accused have been arrested so far.

On February 21, 2020, Prime Minister Imran Khan had formed a three-member commission to investigate the sudden price hike of sugar during the month of January 2020.

Federal Investigation Agency (FIA) Director General headed the commission whereas DIG Ahmed Kamal and DIG Gohar Nafees represented Intelligence Bureau (IB) and Anti-Corruption Establishment (ACE) Punjab as its members respectively.

The Commission then formed nine different teams to investigate the sugar scandal which was a massive one and involved some big names. All nine teams comprised representatives from the FIA, the Securities & Exchange Commission of Pakistan (SECP), Federal Board of Revenue (FBR), Accountant General Pakistan Revenues (AGPR), State Bank of Pakistan (SBP), Anti-Corruption Establishment (ACE) Punjab and the Intelligence Bureau (IB).

In its preliminary report – unveiled on April 5, 2020 – the commission had claimed that sugar mills belonging to the families of the country’s top politicians including the PML-N’s Shehbaz Sharif, PTI’s Jahangir Khan Tareen and Khusro Bakhtiar, PML-Q’s Moonis Elahi and PPP’s Asif Ali Zardari were among beneficiaries of the sugar scam.

In its forensic report – issued on May 21, 2020 – the commission had accused the sugar mill owners of earning illegal profits to the tune of billions of rupees through unjustified price hikes, benami transactions, tax evasion, misuse of subsidy and purchasing sugarcane off the books.

It was also revealed that subsidy of 29 billion rupees was given to sugar industry in the last five years. However, the commission had found that the total income tax paid by 88 sugar mills of the country was Rs 10 billion, after getting a tax refund.

The report on sugar crisis revealed that two main groups had obtained maximum benefit during the crisis; one of the groups, JDW, belongs to Jahangir Tareen who owns six sugar mills. JDW obtained 12.28 per cent of the total export subsidy that amounted to Rs 3.058 billion during the period of 2015-18. Ex- Governor Punjab Makhdoom Syed Ahmed Mehmood of PPP is also a partner in JWD group.

The other group, identified as RYK group, has four sugar mills jointly owned by Makhdoom Umar Shehryar [who is a relative of federal minister Khusro Bakhtiar], Chaudhry Munir of PML-N and Monis Elahi of PML-Q which is part of the ruling coalition.

Among them, they availed a total of 15.83pc export subsidy, amounting to Rs 3.944bn during 2015-18.

The report highlighted that during 2018-19, Mr Tareen’s companies exported 17.24pc of the total production of sugar and availed 22.71pc of total export subsidy, amounting to Rs 561 million, while companies in the RYK group obtained the export subsidy of Rs 452m last year.

Special Assistant to Prime Minister on Interior and Accountability Shahzad Akbar had told the media that sugar mills belonging to Jahangir Tareen’s group were found guilty of “double billing” and “over-invoicing” as well as “corporate fraud”.

Quoting the commission’s report, the advisor had said that JDW Sugar Mills in which Jahangir Tareen owned 21 percent shares, was involved in double booking, under-reporting and over-invoicing. It was also involved in under-invoiced sales from bagasse and molasses, which resulted in 25 percent cost inflation. The mill was involved in forward sales, satta and benami sales, said Shahzad Akbar while elaborating on the commission’s report.

The company owned by Shehbaz Sharif’s family engaged in “double reporting”. Shahzad said the Al-Arabiya Sugar Mills owned by Salman Shehbaz Sharif was also audited and was found involved in a fraud of Rs 400 million through informal receipts and market manipulation.

According to the findings, in 2017-18, sugar mills determined the cost of production at Rs 51 per kilograms whereas as per the calculations of the commission it was estimated at Rs 38 instead. Similarly, in 2018-19, the sugar mills gave the cost price of one kg at Rs 52.60 while, according to the report, the estimated cost was Rs 40, Shahzad said.

The Federal Government not only made the sugar commission report public but also recommended FIA to start criminal investigations against those held responsible by the sugar commission for sugar crisis in the country.

FIA Director Zone-1 Punjab DIG Dr Rizwan was made in charge of the criminal investigations against sugar mafia. Again, various teams of FIA were formed, having representation of various government departments.

In November 2020, FIA registered an FIR against PML-N president Shahbaz Sharif and his sons Hamza Shahbaz and Salman Shahbaz over charges of Rs 25-billion money laundering. Similarly, an FIR was also registered against Jahangir Khan Tareen and his son Ali Tareen under money laundering charges of Rs 4.35 billion.

Both FIRs were registered on the same date and time, i.e, November 14, 2020 at 5: 45pm. After the initial investigations, different investigation rooms at FIA Lahore (Regal Chowk) office were established. An interview room was also designed to question the accused in the sugar scandal. PML-N president Shahbaz Sharif and disgruntled PTI leader Jahangir Khan Tareen along with his son had appeared in the interview room a couple of times.

An FIA team even visited jail to record statement of former Chief Minister Punjab when he was behind the bars in a NAB case.

On the other hand, on March 22, 2021, FIA registered two more FIRs against Jahangir Tareen, his son Ali Tareen and his family members. Similarly, FIA also registered 10 FIRs against satta (gambling) mafia. However, to date, no one from among Tareen or Sharif family could be arrested nor anyone from the satta mafia could be put behind the bars as yet.

Jahangir Tareen and his son Ali had approached the court for pre-arrest bails and after a few appearances, FIA submitted before the court that they don’t want to arrest the disgruntled PTI leader at the moment. Similarly, Shahbaz Sharif and Hamza Shahbaz had also approached court for bail. During the last hearing, the court had taken to task the FIA investigators about their slackness and slow progress into the investigations.

Bol News tried several times to get comments of Director FIA Lahore Dr Rizwan on the issue but he did not respond till the filing of this report.