On April 29, 2020, Chairman Inquiry Commission, Wajid Zia, wrote a letter to Chairman PSMA, Aslam Farouque, saying that Ministry of Interior has constituted a Commission under his chairmanship to probe the increase in sugar prices. He asked PSMA to attend the meeting of the Sugar Inquiry Commission on May 7, 2020 at FIA headquarters Islamabad with experts who could explain the cost of production mechanism.
An official claimed the Commission has found "undeniable" evidence against the mills and sugar dealers in Punjab and Sindh through probe ledger registers.
Insiders claim that the Inquiry Commission has some evidence of illegal sale of sugar through dealers network but is still unable to connect the missing links despite reaching the end retailers.
However, some dealers who have been grilled ruthlessly by the Inquiry Commission's teams of about 100 officials, who also raided sugar mills' their offices and also questioned them in Islamabad, have agreed to turn approvers.
According to insiders, sugar mill owners who are under probe fear bad days ahead as NAB has also initiated inquiry.
The sources said, one group reportedly got permission to set up Mianwali plant for beet crushing but the plant is operating on sugarcane crushing in violation of original permission which was primarily to circumvent the permission on setting up of sugar mills to run and operate under the guise of beet plant by defrauding the government. The group is also said to be making huge investments in Australia to acquire plants overseas. They have a 54% stake in a sugar mill in Australia. The Commission, sources said, will also probe assets of the owners of sugar mills who availed amnesty scheme for funds kept abroad beyond a sum of $ 100,000/- and determine how the funds were sent and the sources. The funds declared in Pakistani rupee are to be used in the Pakistan economy. The group is allegedly involved in massive lowering of recovery in a plant thereby generating tax free profits and acquiring one sugar mill after another.
The same is said to be the case of all mills in southern region Punjab where recovery is depressed and out of books massive profits are generated. The capacities in south have also increased manifold as a result of massive evasion of taxes.
An official associated with the Inquiry Commission said on condition of anonymity that with regard to costing of sugar every mill has three distinct variables: recovery, cost of sugarcane and financial charges therefore any expert would know that to work out exact cost of production on an average basis would be an exercise in futility. Moreover mills with higher recovery want to follow the average cost of production to hide their actual cost of production for purposes of evasion. Same is the case in Sindh where recovery is higher in upper Sindh and less in lower Sindh.