Iran Supreme Court upholds Iranian billionaire’s death sentence

By bne IntelliNews December 6, 2016

The Supreme Court of Iran has upheld the death sentence passed on billionaire Babak Zanjani in March for corruption.

Zanjani was estimated to be worth at least $13.5bn before his arrest, allegedly amassed from under-the-table oil deals on behalf of Iran’s nationalized oil companies during the height of sanctions.

Zanjani was convicted in a televised trial of 'Corruption on Earth', the most severe offence in the Sharia-based system, and embezzling $2.9bn of the oil ministry's money. 

The businessman is also the subject of blacklisting by the US Office of Foreign Assets Control (OFAC) for breaching UN sanctions on Iran, and some of his foreign assets have been seized.

Zanjani was originally arrested in 2013 for his alleged role in a high-level corruption scandal in Turkey, where he was accused of embezzling the $2.9bn with the help of Turkish-Iranian Reza Zarrab.

Zanjani and Zarrab were accused of smuggling bars of gold over the border in commissioned trucks as payment from Turkish oil companies during the halt on official payments under sanctions.

Zanjani was said to be Zarrab’s partner in Iran in Iran to facilitate the payments. 

The then Turkish interior minister Muammer Guler, economy minister Zafer Caglayan and EU affairs minister Egemen Bagis had been accused of taking bribes from the men. They all resigned following the leaks.  

However, a Turkish prosecutor in October 2014 dismissed charges against 53 people in the corruption case that targeted President Recep Tayyip Erdogan’s inner circle.

Zarrab is awaiting trial in the US for allegedly laundering hundreds of millions of dollars and violating US sanctions on Iran. He has been in custody in New York since he was arrested in Florida in March en route to a family trip to Disney World. US prosecutors said Zarrab has used his wealth to buy access to corrupt politicians in Turkey who secured his release from prison there.

Zanjani’s assets were spread far and wide, and the Rouhani administration has admitted it was struggling to track down much of the hidden funds in the three years since his arrest.

His portfolio stretched from several companies under the UAE-headquartered Sorinet Group, which in Iran included everything from aerosol sprays, holiday resorts, bank investments, as well Qeshm Airlines and a football team.

In Tajikistan, the businessman supposedly invested around $600mn to $2.5bn in setting up a bank, investing in another airline and even smaller things such as a taxi company and a bus depot, according to videos of his visit. The companies registered in that country by the businessman included Tajikistan Kont Group, Asian Express Terminal, Ntgroup Investment, Asian Express Airline and Kong Tourism Tajikistan.

It remains to be seen if Iran will ever get back its oil money from these foreign jurisdictions

In 2015 the Tajik government denied Zanjani had any investment or funds in the Persian-speaking country. In July 2016, the governor of the National Bank of Tajikistan, Jamshid Noor Mohammadzadeh, said if Tehran wanted to claim Zanjani’s investments it would have to supply evidence.

“If Iran offers well-substantiated evidence that assets of Babak Zanjani are in banks of the country, the issue will be verified,” said Noor Mohammadzadeh.

But he followed up by saying, “Had the huge sum existed and was in circulation here, the Tajikistan economy would never have faced such a problem and the Samani (Tajik currency) would not have been depreciated,” IRNA reported at the time.

The Economic Basij (Holy Warrior) as he dubbed himself had assets far beyond the CIS countries, including further investments in Malaysia as well. He was, before his incarceration, a board member of Malaysia’s First Islamic Investment Bank and was believed to have been one of its main investors; the bank was first listed by the European Union in December 2012 as an entity helping Iran avoid sanctions and thus sanctioned. The bank was removed from the EU list in January 2016. 

In his version of events, he told Iran Students News Agency that before the sanctions hit Iran, he decided to become a member of the board of directors of a foreign bank in Malaysia and connect his UAE-based firm to the bank to facilitate financial services.

Zanjani said that he helped transfer around €17.5bn of Iranian banks' capitals from outside the country to national bank accounts with a 0.007% interest via the Malaysian group he originally set up.

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