Sindh High Court declares sugar inquiry commission’s report illegal

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The Court declared on Monday the inquiry commission’s and ordered an independent inquiry to be conducted into the shortage of sugar, and price hike.

A two-judge bench directed the government task the FIA or FBR with the responsibility of investigating the matter or form “an impartial commission”.

Owners of over 20 sugar mills in Sindh had filed a petition against the inquiry commission’s report. The petition stated that the committee members cannot be relied upon and their report favours the federal government.

The commission members include FIA Director-General Wajid Zia, Punjab Anti-Corruption Establishment DG Muhammad Goher Nafees and a representative of the Intelligence Bureau. They were hand picked by Prime Minister Imran Khan.

The government is directly involved in the matter and wants to put the blame of the sugar price hike onto mill owners through its commission, the petition added.

What did the sugar inquiry report reveal?

The sugar inquiry report was issued on May 21. It revealed the way sugar barons had cheated farmers, benefited from subsidies and created conditions so that the price of sugar could go up.

PTI’s Jahangir Tareen was among the ones accused of benefiting the most from the crisis. The report said that six major groups control 51% of the total sugar production. Tareen’s JDW Mill has the biggest share—20% of the total production.

The biggest revelation is that they have been manipulating the cost of production (showing higher cost than actual cost). The sugar industry manipulated the cost of production to maximize its gains and claim a subsidy. A one rupee manipulation in cost of production translates into a windfall gain of Rs5.2 billion. In the last five years, the industry has been manipulating the cost by Rs10, Rs12 and Rs15 each year.

They show that they have procured less sugar than they have. And they conceal production. They concealed Rs93 crore in year 2019-20, and Rs1.7b was concealed in 2017-18.

In the last five years, the sugar industry got Rs29 billion in a subsidy but paid Rs22 billion in income tax as a whole and the refunds they claim were Rs12 billion.

So there are 88 sugar mills which got Rs29 billion in subsidies during the last five years, but the net income tax paid by them was Rs10 billion. So this industry is running in taxpayers money.

In 2015, a Rs6.5 billion subsidy was given.

In 2016, a Rs6.5 billion subsidy was given.

In 2017, no subsidy was given.

In 2018, the Center gave a Rs15.5 billion subsidy while Sindh gave a Rs4.1 billion additional subsidy.
In 2019, the Center gave Rs15.5 billion in a subsidy (in this the Center and Punjab were together) while Sindh gave a Rs9.3 billion subsidy.

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