AG advised Hingurana Sugar to obtain liquor manufacturing license

The Auditor General’s Department has advised Hingurana Sugar Company to obtain a liquor manufacturing license without any further delay and start producing ethanol in order to halt its increasing losses, reports say.

The AG’s Department has made the recommendation after auditing the 2016 performance of Galoya Plantations (Pvt.) Ltd. that owns Hingurana Sugar.

Distillery built at Rs. 798 m cost

The auditing, done on 13 February this year, shows the company has already built a distillery at a cost of Rs. 798 million by 31 January and had completed a study on its potential to produce liquor.

It has a stock of 12,490 mt of molasses, a byproduct of its sugar production that could be used in manufacturing liquor.

The company’s management has informed the auditing officers that a daily loss of Rs. 7.5 million is incurred due to its not having a liquor manufacturing license, which could otherwise have been earned by selling 21,500 litres of ethanol a day at Rs. 350 per litre.

Political influence

The state took over Hingurana Sugar in 1997 after an investor had failed to act according to the leasing agreement.

In 2007, Galoya Plantations was formed and was entrusted with its moveable and immovable assets which are spanned on a 277.75 hectare area, on a 30 year leasing agreement.

Hingurana Sugar already had a license to produce ethanol but with the change in the management, that license should have been transferred to the name of Galoya Plantations.

The Finance Ministry secretary has instructed the Liquor manufacturing Commissioner General to do that, but that is yet to be done.

According to reports, the transferring of the liquor manufacturing license is being intentionally delayed in order to show losses and get the company handed over to a businessman friendly with top government politicians.