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FIA Takes on Sugar Mafia

by Newsweek Pakistan

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Accused were colluding to raise commodity prices during Ramzan through a hoax of stock shortage, allege investigators

Pakistan’s Federal Investigation Agency (FIA) on Thursday charged eight major sugar companies and 40 “satta” agents for boosting the prices of the commodity through speculative trade.

According to a statement, the FIA has found that the “sugar mafia” earned Rs. 110 billion over the past year through “speculative pricing”—by increasing the price of sugar from Rs. 70 to Rs. 90/kg through “satta” (price fixing through collusion, rather than market demands). It alleged that the “illegally secured” funds had subsequently been stashed in fake and secret bank accounts for money laundering and tax evasion.

The FIA has not yet arrested anyone, with the department saying that it is awaiting the results of forensic audit of around 32 mobile phones and laptops recovered from the sugar manufacturers’ satta agents.

FIA Director (Lahore) Muhammad Rizwan told media on Thursday that there was “solid evidence” of the sugar mafia’s illegal activities, adding that the sheer volume of data gathered could be used to print “thousands of books.” He said that in addition to the eight groups charged on Thursday, two others had been charged earlier, bringing to 10 the total cases registered against the sugar mafia. Similarly, he added, 40 people had been identified who had been in communication with each other to fix prices of sugar.

The FIA said that nearly all the major sugar manufacturers—some of whom belong to the ruling party—had been found complicit. Among the groups implicated are the Sharif Group, Tareen Group, Alliance Group, Almoiz Thal Group and Hamza Group. The FIA had booked Jahangir Tareen’s JDW group, the Sharif group related to PMLN President Shehbaz Sharif and his sons and Gourmet Bakers & Sweets (Pvt.) Ltd, Lahore on Wednesday.

During the press conference, the FIA director alleged that the sugar mafia had conspired to hike prices of the commodity in the month of Ramzan. He said that 10 of the “satta” mafia groups were from Lahore, while the rest were located in Multan, Hasilpur, Khanewal and Bahawalpur. The FIA would arrest the accused only after cases had been registered against them under the Anti-Money Laundering Act, he added.

According to the FIR filed, the inquiry against the sugar mafia found that “sugar industry barons, sugar-brokers and their satta-agents” were conniving with sugar-mills to “dishonestly and fraudulently maneuver, manipulate and artificially hike sugar prices, amidst hoax of impending sugar-stocks shortages.”

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