Sitara Chemical has denied wrongdoing in an FIA probe into an alleged Rs11.96 billion power fraud, but the case has reignited questions over accountability, IPPs and governance.
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Sitara Chemical strongly rejected the allegations, stating that the FIR primarily relates to the affairs of another company unrelated to Sitara Chemical. The company emphasized that neither it nor its CEO has been found guilty by any court or competent authority. It added that its manufacturing and business operations continue without interruption and that it will pursue all available legal remedies to protect its rights and interests.
In a clarification submitted to the Pakistan Stock Exchange (PSX), the company said the FIR primarily concerns the affairs of another company and that the allegations remain unproven, with no court or competent authority having issued any findings against Sitara Chemical or its CEO.
According to the FIA, however, the case stems from alleged irregularities between 2007 and 2015, during which Sitara Energy Limited, Sitara Chemical Industries Limited, and officials of the Faisalabad Electric Supply Company (FESCO) allegedly colluded in electricity sale and purchase arrangements that caused an estimated Rs11.96 billion loss to Pakistan’s national exchequer.
The FIR alleges that Sitara Energy sold electricity to FESCO at rates higher than those approved by the Central Power Purchasing Agency (CPPA), while Sitara Chemical purchased electricity from FESCO at rates below the approved levels, resulting in significant financial losses for the government.
Questions that remain unanswered
While Sitara Chemical has categorically denied the allegations, several key questions remain.
The first is why Mian Muhammad Idrees has yet to issue a detailed public explanation addressing the allegations. If the company maintains it has done nothing wrong, observers argue that greater transparency could help answer public concerns.
Another important question relates to FESCO’s leadership during the period under investigation. Which former chairmen, board members and senior officials approved the disputed arrangements, and what action, if any, has been taken against them?
Renewed scrutiny of IPPs and governance
The case has once again drawn attention to Pakistan’s Independent Power Producers (IPPs), regulatory oversight and concerns over corporate influence within the energy sector.
Critics have long argued that politically connected business groups have benefited from preferential arrangements with state institutions. The latest investigation has revived broader public debate over governance, transparency and potential conflicts of interest in Pakistan’s power sector.
Some political commentators have also pointed to the involvement of influential business families in the energy sector, including companies linked to families of senior political leaders. However, there is currently no court ruling or official investigative finding establishing that Prime Minister Shehbaz Sharif, his family, President Asif Ali Zardari, or their families are directly connected to the allegations in this FIA case or have committed any wrongdoing in relation to it.
Sitara Chemical’s response
Sitara Chemical maintains that the allegations are unfounded and will vigorously defend its legal rights in court. The company also stressed that the investigation has had no impact on its day-to-day operations or production activities.
Meanwhile, the FIA investigation remains ongoing, and no court has yet determined the guilt or liability of any individual or company named in the case.
Editor’s Note: The allegations cited in this report are based on the FIA’s FIR and publicly available records. The investigation is ongoing, and no court has convicted any of the accused. Questions raised in this story are presented in the public interest and should not be interpreted as findings of fact or proof of wrongdoing.
