Punjab Chief Minister Shahbaz Sharif faces a disqualification reference after the Supreme Court has halted the operation of three sugar mills of the ruling family, which were relocated in violation of a ban imposed by the Punjab government itself.

First, the Pakistan Tehreek-e-Insaf (PTI) sent a reference against the chief minister to the Punjab Assembly Speaker for allegedly violating his authority to set up sugar mills at new locations in the cotton belt of the Punjab, which his own government had banned in 2006. As expected, the Speaker rejected the reference, paving the way for the PTI to move courts and the Election Commission of Pakistan (ECP). The reference, invoking Articles 62 and 63 of the Constitution, alleged the chief minister had misused his authority by shifting his family’s Ittefaq and Chaudhry Sugar Mills to banned areas in the Punjab. The Lahore High Court has also declared the relocation of the mills illegal in 2016, it added. It pleaded that a London court had found that Shahbaz Sharif owed $17 million to a financial institution as one of the directors of the Hudaibiya Mills on a plea of Al-Taufeeq Bank in 1999. “Shahbaz paid back the amount in February 2000, and the money was transferred to London through money laundering as no money trail is available for the transfer of the amount,” it alleged.
However, the Punjab Assembly Speaker, taking a cue from the National Assembly Speaker in a reference against Prime Minister Nawaz Sharif in the Panama case, rejected it on the grounds that the Lahore High Court’s decision, which was the basis of the case, had already been challenged in the court through an intra-court appeal, so he could not send the reference to the Election Commission of Pakistan. He observed, “The question of the chief minister’s disqualification under Article 63 (2) of the Constitution does not arise at this stage, as the matter is sub judice.”

Earlier, the Lahore High Court ordered three sessions judges to seal three sugar mills of the Sharif family if they were still operating despite a restraining order of the Supreme Court. The bench, headed by Chief Justice Syed Mansoor Ali Shah, said if the mills were still operational, their manufacturing process should be sealed immediately. The bench also directed the district police to accompany the sessions judges and support them in inspection of the mills.

On February 9, the Supreme Court had ordered suspending operations of the mills and remanded the case to the LHC on an application, filed by PTI General Secretary Jahangir Tareen. He submitted that the court’s restraining order was not being implemented and the administration of Chaudhry Sugar Mills Limited in Rahim Yar Khan, Ittefaq Sugar Mills in Bahawalpur and Haseeb Waqas Sugar Mills in Muzaffargarh were still working. The court set aside the Lahore High Court’s interim order that allowed the Sharif family and their relatives to continue crushing of sugar at the new mills established in south Punjab. The bench observed the LHC had not taken into consideration the fundamental documents and passed restraining orders in favour of the Sharif family and their relatives. “We are suspending the crushing of sugar till the final disposal of the case by the LHC,” the order said. It also warned of strict action in case of any violation of the order.

The court also rejected the Sharif family’s attorney’s “mercy plea” to allow operation of the sugar mills for the ongoing sugarcane crushing season, which would conclude by the end of March. The Sharif family had contended that the halt in crushing would cause a loss of Rs380 million to them. Justice Umar Ata Bandial, a member of the Supreme Court Bench, observed that when the court looked into the issue of conflict of interest it questioned how the chief executive of the province (Punjab Chief Minister Shahbaz Sharif) could draft a self-serving policy.

On October 10, 2016, LHC Justice Aysha A.Malik had stopped the Sharif family and their relatives to start operation of their five mills at new locations. However, a division bench allowed their three sugar mills – Ittefaq Sugar Mills, Chaudhry Sugar Mills and Haseeb Waqas Sugar Mills – to continue crushing of sugar. The division bench passed several interim orders in favour of the ruling family.
According to experts, it is a clear case of conflict of interest as the Punjab government had banned establishment or enlargement of sugar mills in the Punjab to protect and promote the cultivation of cotton in specified areas in 2006. However, the Sharifs set up new sugar mills under the pretext of relocation. To facilitate the ruling family, the Punjab Industries Department issued a notification on December 4, 2015, which allowed owners of Chaudhry Sugar Mills and Ittefaq Sugar Mills in Sahiwal, Haseeb Waqas Sugar Mills in Nankana Sahib, Abdullah (Yousaf) Sugar Mills in Sargodha and Abdullah Sugar Mills in Depalpur to move their units to other districts.

The case will add to problems of the ruling family, which is already facing a tough time in the Supreme Court in the Panama Leaks case. It appears the Punjab Industries Department issued the notification to facilitate the ruling family. If the sugar mills were relocated illegally, as the court ruled, someone will have to be held responsible for it, if not the Sharifs. After the rejection of the disqualification reference, the case will reach the Supreme Court at last, as provincial and national institutions may not be able to reach any conclusion against the ruling family. The Ittefaq Sugar Mills is owned by Prime Minister Nawaz Sharif, his sons – Hassan and Hussain Nawaz, his daughter Maryam and wife Kulsoom Nawaz. The Supreme Court may soon be hearing the case, side by side with the Panama case.