Tehran Prosecutor: They Did Not Embezzle at Petrochemical, They Used It for Personal Use

The “Corruption in Petrochemicals” case has become a major controversy. The Tehran prosecutor says the defendants did not embezzle and that their crime is that they “personally used” the transactions. The first defendant says that everything was done with “high-level decision-making.”

Abbas Jafari Dolatabadi, the prosecutor of Tehran, believes that the “Corruption in Petrochemicals” case is one of the most important cases filed in Iran since 2012. In justifying the seven-year delay in handling this case, the prosecutor of Tehran pointed to its “heavy figures” and “extremely large financial volume.”

However, he said on Tuesday, March 11, that “there is no embezzlement” in the case. “The defendants’ crime is that they have personally benefited from the transactions,” Jafari-Dowlatabadi said.

The "Corruption in Petrochemicals" case, which has now become a major controversy for its defendants due to its widespread coverage in the media and social networks, is one of the financial corruption cases that has its roots in the Iranian government's covert efforts to circumvent international sanctions.

Mehdi Sharifi Nikanfs, the current CEO of Petrochemical Trading Company, told IRNA on Tuesday, March 11: "This case has been raised for several years, but two court sessions have been held so far, and given the country's conditions and the export issue, we requested that the issue of circumventing sanctions not be raised."

" The total amount is not even 30 million euros, don't belittle it ."

According to Sharifi Niknafs, the Petrochemical Trading Company exported 10 to 11 billion dollars in 2008, 2009, and 2010 and “has settled accounts with all petrochemical complexes.” The current CEO of the Petrochemical Trading Company, noting that “the total amount of illegitimate money does not even reach 30 million euros,” emphasized in an interview with IRNA: “These slanders will be detrimental to society.”

To circumvent banking sanctions, the Iranian government needs a private network abroad to act as an intermediary for the sale of Iranian oil, gas, and petrochemical products. This intermediary establishes a company, receives money from the buyer of Iranian oil and gas, delivers it to the government inside the country, and receives a fee or commission. The percentage of this commission also depends on the type of activity.

The figures who are tasked with establishing such companies either already have the opportunity to cooperate as intermediaries or are trusted figures of the Iranian government and are entering into a dangerous game. Of course, circumventing Iranian sanctions can have serious consequences for these intermediaries, as happened to Reza Zarrab.

The “Corruption in Petrochemicals” case dates back to the era of Mahmoud Ahmadinejad’s administration and the heavy US sanctions on Iran’s oil and gas industries. The Petrochemical Trading Company, which was the main exporter of Iranian petrochemical products, was handed over to the private sector by the Ahmadinejad administration in order to help the government circumvent the sanctions.

It has now become clear that Reza Hamzehlou, the company's CEO (2009-2011), Amin Qorashi Sarvestani, chairman of the board, Abbas Samimi, a board member, and two other company members, Alireza Alaei Rahmani and Mostafa Tehrani Safa, kept the company's transaction funds in their personal accounts abroad, and purchased the equivalent currency in Iran and deposited it into the main seller's account.

Reza Hamzehlou said in court that all his actions between 2009 and 2011 were “based on decisions from above.” Hamzehlou said in his defense: “The petrochemical business during the sanctions period, by accepting the risks and the individual positions of each loved one who is now being prosecuted, not only did not benefit, but they did these things to help the system.”

Personal withdrawal and transaction

The Tehran prosecutor says the defendants in the “Corruption in Petrochemicals” case – including the five named above – should have “promptly delivered the currency to the Central Bank.” But the delay in delivering the currency is not the only issue raised in the case.

The 14 individuals named in this case are accused of illegally withdrawing part of the money or conducting personal transactions with it and profiting from the turnover of "6 billion and 656 million euros" inside and outside the country.

For example, Amin Qorashi Sarvestani, the third defendant in this case, the chairman of the board of directors of the then petrochemical company and the owner of 45% of the Dubai-based company, has deposited 31 billion and 863 million Tomans in his own favor, according to the indictment report.

Another defendant in this case is Marjan Sheikhol-Eslami Al-Agha, who, according to the Tehran prosecutor, “fled” after the case was filed in 2012. Marjan Sheikhol-Eslami Al-Agha, who is identified as the main partner of the first defendant in the case, Reza Hamzehlou, owned 50% of a company called “Deniz” in Turkey.

According to Reza Hamzehlou, the company “Deniz” was established to transfer blocked Iranian money into the country. Another company called “Hetra Tejarat” owned by Marjan Sheikh-ol-Islami Al-Agha also played a role in transferring money to Iran. Another company called “Pelican” is also mentioned in the indictment.

The indictment states: “Reza Hamzeh Lo is the first CEO of the Petrochemical Trading Company after the privatization of the company in 2009, who, in collusion with Ms. Marjan Sheikh-ul-Islami, did not comply with legal regulations in the formation of the companies “Deniz” and “Pelican.”

Who is the unknown person? 

Marjan Sheikhol-Islami Al-Agha is accused of having acquired a total of $16,653,000 in illicit wealth with Hamza Lou, in addition to receiving commissions.

According to the indictment, he deposited the funds received into his companies' accounts under the pretext of sanctions and the inability to deposit money into the main accounts.

It is not clear how much Marjan Sheikh-ul-Islami Al-Agha received as a commission and who was his liaison with the IRGC headquarters.

Source: DW