Sugar Price Scam: Consumer forum asks CIAA to probe irregularity in Salt Trading

KATHMANDU, OCT 10 -

The Forum for Protection of Consumer Rights-Nepal (FPCRN) has lodged a complaint at the Commission for Investigation of Abuse of Authority (CIAA) against the top officials of Salt Trading Corporation (STC) over alleged financial irregularity in sugar trading. A study carried out by the forum has found the STC to have  made a profit over Rs 1 billion by fleecing consumers while trading suger in local market.

The FPCRN study revealed that the STC bought 50,000 tonnes of sugar from domestic sugar producers at price ranging Rs 52-55 per kg and sold in the market at Rs 76, racking up a profit in excess of 20 percent. “This is against the Blackmarketing Act,” says the FPCRN.

On Tuesday, the FPCRN also filed a case at the Metropolitan Police Range, Hanuman Dhoka, asking police to take immediate action against STC top officials, including its General Managar Urmila Shrestha, Sales Division Chief Pankaj Joshi, Trade Division Chief Bhagwati Rana under the Blackmarketing Act.

The forum also filed a complaint at the Department of Commerce and Supply Management citing that the STC move was against the Consumer Rights Protection Act. A government committee comprising Director General of the Department of Commerce and Supply Management and Chief District Officer of Kathmandu District is also scheduled to make public its report on STC’s sugar trade.

“STC sugar does not cost more than Rs 65 per kg, including the transportation and other charges,” said Jyoti Baniya, general secretary of the consumer forum. He said that the investigation had showed that the STC bought sugar at higher rate from domestic producers and hiked the price after releasing sugar in the market, assuring good profit to traders, who bought sugar from it.

The complaint filed at the CIAA says the STC, after selling sugar to over 100 traders, increased the price of sugar eights times—Rs 20 per kg—in retail market during the period between May 14 to August 5, 2012. It further says that the public enterprise bought sugar at much higher rate than the factory gate price of the domestic producers, including Bagmati Sugar Mill, Maha Laxmi Sugar Mill, Eastern Sugar Mill, Shree Ram Sugar Mill.

Bainya said that while buying sugar from these producers at higher rate STC had incurred about Rs 30 million in loss, but the officials and traders made profit. “The government must investigate into this matter and bring down the sugar price which has increased to over Rs 80 per kg in retail market due to the nexus between STC officials and traders,” he added.”STC, in which the government has 11 percent stake, was supposed to intervene the market but unfortunately the organisation had cheated on consumers.”

However, the STC has refuted claims of the consumer forum as “baseless”. The public enterrise said its market share is only around 15 percent in the total annual demand of 200,000 tonnes and reduction in sugar price had helped bring the price down from Rs 90 to Rs 80 per kg in retail market. “We have every proof of fair trading and will produce it when needed,” said STC General Manager Shrestha, while claiming to have already submitted all information to the Commerce Department.

Source: The Kathmandu Post