Iran's Bank Melli Manager Resigns

28 September 2011 | 13:34 Code : 16589 Latest Headlines
 Bank Melli of Iran Managing Director Mahmoud-Reza Khavari said in a letter addressed to Iranian Economy Minister Shamsoddin Hosseini that "to respect public opinion" he would resign from his post, even though Bank Melli was not directly involved in the scandal, which he described as "this vicious phenomenon". 

Meantime, the Economy Ministry said on its website that an ad hoc governmental committee has instructed the Central Bank of Iran to remove the head of the bank at the centre of the allegations, Bank Saderat, and of the smaller Bank Saman. 

A spokesman for Bank Saderat -- a large, partly privatized company -- denied reports that the bank's chief had lost his post, while Bank Saman was not immediately available for comment. 

The developments came after the biggest bank scam in Iran's history. 

Seven state-owned and private banks including Saderat Bank have reportedly been involved in the $2.6 billion-embezzlement. 

The financial scandal entailed the forging of fraudulent documents to secure a multi-billion dollar credit, which was then used to purchase state-owned companies. 

Managing-Director of the Saderat Bank Mohammad Jahromi took part in a press conference on September 9, 2011, to announce that his bank was not involved in the case. However, he confirmed that the financial abuse of seven banks in Iran has been carried out using forged documents. 

The scandal centers on a businessman, Mah-Afarid Khosravi, also known as Amir Mansour Khosravi. The claim against him is that he forged letters of credit from the partially state-owned Bank Saderat, the country's second-largest bank, and allegedly gave the fake documents to seven other banks, including Bank Melli. These were then allegedly used to access credit which helped him fund some 40 companies and try to buy a large state-owned steel factory. 

The government has denied any link to the alleged fraud. 

The embezzled money, 30,000bln rials, amounts to almost double the capital of any leading Iranian bank. 

Prosecutor General Gholam Hossein Mohseni-Ejei has been assigned by the Judiciary Chief to investigate the case. 

Mohseni Ejei said in a press conference on Monday that Khosravi and the heads of two branches of Bank Saderat and Bank Melli were in jail, adding that a death penalty could await defendants should their intention to undermine the Islamic ruling system by damaging the economy were proved. He did not give the names of the jailed bankers, or provide any other details. Nor did he say that either bank was implicated in the scandal. 

Last week Mohseni Ejei announced that 19 people have been arrested in connection with the case. 

Ejei mentioned that the necessary measures have been taken to prevent the criminals from leaving the country or transferring money to offshore accounts. 

A number of suspects have been banned from leaving the country and some others, who intended to transfer their money and properties, were banned from entering financial transactions, Ejei said. 

Iran's Central Bank Governor Mahmoud Bahmani had earlier told the media that the money is mainly in Iran. 

Intelligence Minister Heidar Moslehi almost confirmed Bahmani's remarks, and said that only 270 billion rials (about 25.3 million dollars) of the embezzled money has been wired abroad. 

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