The resurrection of Ghulam Ahmed Mir as Tourism Minister in the Omar Abdullah government has brought back the focus on the 2006 sex scandal in which young girls were alleged to have been supplied to several politicians, police officers, bureaucrats and businessmen. Mir was arrested in the scandal, but a CBI court acquitted him later.
In 2006, young Kashmiri girls, some of them belonging to the families of alleged militants, were found to have been forced into a prostitution racket, often after being drugged or under the threat of blackmail. One of the girls gave the statement that the racket was actually a nexus among police, politicians and surrendered militants. The scandal shook the then Ghulam Nabi Azad government badly.
On 29 September 2012, a CBI special court in Chandigarh acquitted the financial commissioner of the state's Finance Department, Iqbal Khandey; Congress MLA Ghulam Ahmed Mir; former minister Raman Matto; and Sabina and her husband Abdul Hamid, who were alleged to be behind the sex scandal. They were facing trial in the special CBI court for six years under Section (5) of the Prevention of Immoral Traffic Act. Omar Abdullah promoted Iqbal Khandey as financial commissioner in soon after the CBI verdict. Khandey is now in the panel of probable chief secretaries once present chief secretary Madhav Lal demits his office in March 2013. The period (29 June 2006 to 18 March 2007) Khandey spent in jail has been considered as his "period of duty".
Three women had alleged that they were sexually exploited by the accused. Later, all the alleged victims in their statements before the court denied their earlier statements and turned hostile. People close to the families of the victims allege that the latter were intimidated and lured by money to deny their statements in court. They say that the government did not provide the victims with proper security cover. Recently, the J&K high court pulled up the state chief secretary for his failure to rehabilitate the victims.
The J&K High Court, after examining local police diaries running into 600 pages and CBI report running into 7,000 pages had asked the chief judicial magistrate of Srinagar in October 2007, "to take cognizance against the first category, further investigation into second and reinvestigation into third category of list". The order is gathering dust in the office of the chief judicial magistrate.