Bank Melli sues Bank Saderat over fraud

in the wake of a $2.6 billion fraud that has shaken Iran’s economic and political establishment.

 

The biggest fraud in the 33-year history of the Islamic Republic revolves around forged documents allegedly used by the directors of the Amir Mansur Aria Investment Company to secure bank loans totaling $2.6 billion to buy state-owned companies under the government’s privatization scheme.

Seven banks, including Bank Saderat—a large, partly privatized company—have been implicated in the fraud that began in 2007 but only came to light last September.  However, it is unclear to what extent officials of those seven banks were complicit in the fraud and to what extent the banks are actually victims of the fraud.

“Bank Melli has taken legal action against people and companies of the Aria group and Bank Saderat because of their involvement in the criminal act that has caused great financial damage to Bank Melli and its reputation,” the bank’s managing director was quoted as saying by the Iranian Students News Agency (ISNA).

Bank Melli said nothing about suing the other six implicated banks.  Nor did it say why it was not suing others.

The head of Bank Saderat, who was forced from his post last year by a government committee, said he helped uncover the crime rather than being part of it.

Thirty-two people suspected of involvement in the fraud went on trial earlier this year in Tehran.  The 13th session of that trial was held Sunday.

The main defendant, named by ISNA earlier this year as Mah Afarin Amir Khosravi, faces the charge of “corruption on earth,” which carries the death penalty.  He is a businessman, not a banker.  He is believed to have been the chief benefactor of the fraud by using the bank loans he obtained illicitly to buy up firms being privatized.

Many opponents of President Ahmadi-nejad have tried to tie his administration to the fraud by saying Khosravi had “links”—never further described—to the president’s chief of staff, Esfandiar Rahim Mashai.

Conservatives accuse Mashai of spreading a “deviant current” that seeks to dilute the Islamic character of Iran and undermine the role of the clergy.

The names of only a few of the 32 on trial have been revealed. Mashai is not one of them.  Nor have any of the others named been identified as close to the president or his aide.