Ansari Sugar Mills vs Anver Majid: the saga continues

The desire of former President Asif Ali Zardari’s associate, and alleged partner in money laundering, to control his sugar mills from Karachi Central Jail continues to hamper the ability of the company to publish its financial statements

Regular readers of these short reports have likely picked up on the fact that Profit aims to cover a wide variety of listed companies, and sectors. We like to think we are building up both our, and our readers’, familiarity with a subject. 

And then sometimes, we deliberately cover a company again and again, because it is so ludicrous, that we can amuse ourselves just by tracking the chain of events. 

This case would be the latter. Poor Ansari Sugar Mills. As we pointed out in August 2020, and again in October 2020, the company has been trying to hold its annual general meeting since February 2020. But its former CEO, Anver Majid, has been fighting to make sure he remains in charge of Ansari Sugar Mills, even if Ansari Sugar Mills wants him gone. You would think this should be easy. After all, the man is in jail. [restrict paid=”true”]

Let us recap. A Joint Investigation Team (JIT) set up by the Supreme Court accused Anver Majid in December 2018 report of money laundering for former President Asif Ali Zardari, through ‘fake accounts’. According to the JIT, most companies in Omni Group – a conglomerate that owns several companies and, among other things, controls an absurdly large proportion of Pakistan’s sugar manufacturing companies, owned by Anver Majid – acted as shell companies, and as a front group for Zardari himself.

Anver Majid was arrested in August 2018, and has been in jail or out on bail for health reasons since then. The case is still ongoing, for now. But what is well-documented on the Pakistan Stock Exchange (PSX), is that while sitting in jail in January 2020, Majid found out that the company was going to hold an AGM of its shareholders, and subsequently sued the company in February 2020. 

Majid is not only the CEO, but he is also a director and holds 51.3% of shares in the company. Majid’s lawyers said the company was taking advantage of the fact that he was behind bars, and conducting an annual general meeting without prior notice to Majid, which was a mandatory requirement.

So, a stay order was issued by the court, which prohibited Ansari Sugar Mills from holding the meeting. That stay order has been in place since February 2020. It also explains why the last annual report publicly available is from 2017, and the last financial report is from June 30, 2018.

In the latest notice issued to the PSX on December 31, Ansari Sugar Mills pointed out that the annual general meeting cannot be held until the next date of hearing, which will be on January 7, 2021. Not that that means anything: the last date of hearing was on October 25, 2020, and just about nothing has changed since then.

Even Ansari Sugar Mills’ own tone over the months has shifted from anxious to, at this point, resigned, explaining in the notice: “the said stay order is continued from time to time, and still in the field.” The company cannot submit any new accounts because of the court stay order, and asked the PSX to ‘view the peculiar circumstances of the company’. 

Peculiar indeed. Anver Majid is not willing to cede control of the company he owns – legitimately or otherwise – even from his jail cell. It is a gloomy start to the new year for Ansari Sugar Mills.

To recap: in 2015, the Federal Investigation Agency (FIA) started an investigation of four suspicious accounts in Summit Bank, which went on until 2018. The Supreme Court took suo motu notice, and ordered a joint investigation team (JIT) to investigate, which went through roughly 11,500 bank accounts. In the final JIT report issued in December 2018, the JIT implicated President Asif Ali Zardari, and also Anver Majid.

According to the report,  Anver Majid and his family took bribes and managed Zaradr’s money laundering. In exchange, the Omni Group – a conglomerate that owns several companies and, among other things, controls an absurdly large proportion of Pakistan’s sugar manufacturing companies, owned by Anver Majid – benefitted, and jumping from six companies in 2007, to 83 companies by 2018, with most of the expansion coinciding with Zardari’s presidency (2008-2013).

According to the JIT, most of these companies acted as shell companies, and as a front group for Zardari himself. According to documents compiled by the JIT, between 2007 and 2018, Zardari and his family members declared a taxable income of Rs1.64 billion, while declaring personal assets valued at Rs7.74 billion.

Meanwhile, some of the money from the fake accounts was used for Anver Majid’s family. The JIT said that Rs11.12 million were paid to renovate Anver Majid’s home. Similarly, some money was used to renovate clothing boutique ‘Menahil and Mehreen’ in the upscale Clifton neighbourhood of Karachi, owned by Anver Majid’s daughter-in-law.

And just in case you thought the JIT had not noticed Ansari Sugar Mills: it did. In its report it said that Ansari Sugar Mills has 18 complaints pending against it in the Sindh Abadgar Board, a semi-autonomous body meant to protect the interests of farmers in Sindh, with allegations that it had not paid up to Rs11.2 million to sugarcane farmers. (Notice the pattern? About Rs11.2 million missing from the payments to farmers and almost the same amount spent on renovating his home?)

Furthermore, the JIT accused the mill of having unexplained income reflecting money laundering to the tune of Rs1,072 million. [/restrict]

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