Case of Former Central Bank Officials to Be Reviewed Again

The public relations office of Iran’s “Supreme Court” has announced that the retrial case of the former head and deputy of the Central Bank, known as the “currency system disruption” case, will be reviewed again.

According to the “Supreme Court,” the retrial verdict for Valiollah Seif, former head of Iran’s Central Bank, Ahmad Araghchi, former currency deputy of the Central Bank, and other defendants in this case, who were convicted as implementers of macroeconomic currency policies, has been issued by the first branch of the Supreme Court and the case will be referred to the relevant branch for renewed review.

Valiollah Seif served as the head of Iran’s Central Bank for 5 years from 2013 to summer 2018. He opposed the 4,200 toman currency policy. Following currency turbulence in 2017, he and a number of managers and officials faced charges in the “currency system disruption” case.

In the case of former Central Bank managers, Ahmad Araghchi, former currency deputy of the Central Bank and nephew of Abbas Araghchi (secretary of the Islamic Republic’s Supreme Council for Foreign Policy), stands out. Besides him, Central Bank officials such as Salar Aghakhani are also among the defendants in this case.

Charges Against Former Central Bank Officials

In the indictment of the former Central Bank officials’ case, it is stated that Central Bank measures caused tension in the currency market. The charges by Iran’s judiciary against former Central Bank managers date back to the period of currency and coin market turbulence in the last days of 2017 and early 2018.

That year, the implementation of the 4,200 toman currency policy began with an announcement by Ishaq Jahangiri, former vice president. Some critics blamed the Central Bank for the chaos in the currency market at that time.

Another criticism raised against the Central Bank’s performance was “unlimited coin sales.” In one instance, an individual had pre-purchased more than 38,000 coins from the Central Bank.

Gholamreza Mohseni Ejei, then spokesman for Iran’s judiciary, said in September 2017: “We reach from lower-level individuals to big shots and to the central point. For example, from a broker at Sabze Meidan to Mazloomin and from him to Araghchi and from him to Seif.”

Vahid Mazloomin, nicknamed “coin sultan,” was one of the individuals executed in November 2018. Among his charges was “currency and coin smuggling.” However, it was later said that he had no coins at the time of his arrest.

Central Bank Officials and Currency Smuggling

Salar Aghakhani, who is the first defendant in the currency violations case, was the Central Bank’s agent in distributing currency to the market. The judiciary says that from him the case led to Ahmad Araghchi and Valiollah Seif. According to the judiciary, this former Central Bank official “systematically smuggled more than 160 million dollars in currency.” Paying bribes is among his other charges.

The charges in the case of former Central Bank managers stem from the bank’s interference in “forward currency” market transactions. In August 2017, Ahmad Araghchi took over the position of currency deputy of Iran’s Central Bank. In the second half of that year, with the start of the currency crisis, Iran’s Central Bank decided to intervene discreetly in the currency market through its trusted individuals, which ultimately led to an agreement with Salar Aghakhani.

“Forward currency” refers to currency that is traded on a certain day but is delivered the next day.

In the forward market, currency traders announced rates and the Central Bank, through its agents, offered prices lower than the highest announced rate to reduce the currency rate through this method.

According to Shargh newspaper, Aghakhani was arrested in August 2018 and released on bail but later completely disappeared and left Iran.

Prison Sentences Issued for “Currency System Disruption” Defendants

In August 2019, the first hearing of the trial regarding currency disruptors related to the Central Bank’s domain was held in the second branch of the Special Court for Economic Crimes. After conducting investigations and judicial procedures, the court issued its verdict regarding the defendants. Zabiollah Khodaian, spokesman for the judiciary, announced the issued sentences on October 15, 2021.

Based on the judiciary’s verdict, Valiollah Seif, the first defendant and former head of Iran’s Central Bank, and Ahmad Araghchi, the second defendant and former currency deputy of the Central Bank, were convicted of disrupting the order and calm of the currency market, creating grounds for illegal currency trading, as well as neglect and mismanagement during their tenure to 10 and 8 years of imprisonment respectively.

Salar Aghakhani, the Central Bank’s agent, was also convicted of illegal currency trading and paying bribes to an employee of the presidential office and the currency deputy of the Central Bank to 13 years of imprisonment.

Source: DW