The provisional order of the Competition Commission of Pakistan (CCP) has concluded that Pakistan Sugar Mills Association (PSMA) was allegedly involved in cartelisation.
It has been reliably learnt here on Wednesday that the commission has found that the association was allegedly involved in cartelisation, but its decision could not be made public because the superior judiciary restrained the CCP for announcing the final order until Sindh High Court gives its decision on related matters.
According to sources, the CCP has submitted its provisional order before the Sindh High Court since July 2010 in which it was proved that PSMA was involved in cartelisation but the Commission was restrained to make its final order thus it could not be made public.
In its provisional order, the CCP has clearly indicated that maximum fine should be imposed on the sugar mills for alleged involvement in cartelisation. Under the competition law, there is a penalty of Rs 75 million fine or 10 percent of total turnover against those who found guilty of violating Competition law 2010. The CCP conducted an inquiry against PSMA in October 2009 and concluded that the association were allegedly involved in cartelisation on couple of accounts that included the fixation of support price as documents confiscated by the CCP team found that the milers established a nexus to keep sugarcane price at certain level.
The CCP also found involvement of PSMA into collusive biding for the tenders of sugar issued by the Trading Corporation of Pakistan. These were prima facie charges against PSMA and after completing hearings, the CCP found that some charges were correct and maximum penalty under the competition law should be imposed against violators.
When contacted, Chairperson, Competition Commission of Pakistan, Rahat Kaunain Hassan, she said that this matter was sub-judice so she would not make any comment over it. Giving her expert view on the ongoing sugar crisis in the overall context of CCP, Rahat Kaunain Hassan said that the government would have to make availability of sugar to consumers by ensuring releases of 10,000 tons of sweetener for daily consumption from Trading Corporation of Pakistan (TCP) to retail traders by improving its management and governance mechanism.
"The CCP does not deal with hoarding of sugar or any other commodity as our law permits us to take action against those who found involved in cartelisation or any other deceptive marketing practices in a bid to ensure competition for all market players," the Chairperson of CCP said.
She said the competition law did not deal with hoarding and other related management issues of the sugar crisis but the CCP would remain vigilant to review any violation in terms of cartelisation or using deceptive marketing practices in a bid to ensure competition among the market players. She said that the TCP possessed over 200,000 tons of sugar and the daily consumption in the country stood at 10,000 tons so the ample stock of the commodity was available with the TCP for next 20 days.
"Where is the problem when sufficient sugar is available," she raised a question and added that the government would have to ensure availability to consumers by avoiding hoarding. After 20 days, she said, sugar mills would start crushing season and there would be no shortages.