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Middle East

Iran’s Khamenei 'controls mysterious $95bn business'

Text by FRANCE 24

Latest update : 2013-11-12

Iran’s supreme leader Ayatollah Ali Khamenei heads a mysterious $95 billion business empire, a Reuters investigation revealed on Tuesday. One of the key components of this powerful enterprise is the systematic seizure of real estate.

Iran’s supreme leader Ayatollah Ali Khamenei controls a business empire valued at around $US95 billion, more than the oil-rich country’s total annual petroleum exports, an investigation by the Reuters news agency revealed on Tuesday.

Reuters said Khamenei’s business, which is named Setad, is crucial to his grip on power. The organisation’s interests reach into almost every sector of Iranian industry, including oil, telecommunications, finance and even ostrich farming.

The US Treasury Department imposed sanctions on Setad and some of its corporate holdings in June, describing it as “a massive network of front companies hiding assets on behalf of ... Iran’s leadership”.

Setad operates by systematically seizing private property, much of it belonging to members of religious minorities, such as Shiite Muslims, business people and Iranians living abroad. The organisation then claims in court, sometimes falsely,  that the properties had been abandoned. Some are sold at auction. With others, payments are extracted from the original owners.

Last May alone, Setad put roughly 300 properties up for auction, Reuters reported following its six-month investigation.

From charity to business empire

Setad was purportedly established to manage and sell properties abandoned in the turbulent years that followed Iran’s 1979 Islamic Revolution. According to one of its co-founders, it was created to help the poor and war veterans and was only meant to exist for two years.

Under Khamenei, the organisation has expanded its corporate holdings, buying stakes in dozens of Iranian companies, both private and public, with the stated goal of creating an Iranian conglomerate to boost the country’s economic growth. While Setad still controls a charitable foundation, it is not clear how much money goes to charity.

Setad’s total worth is also difficult to pinpoint because of the secrecy of its accounts. Reuters estimated it at around $95 billion, made up of about $52 billion in real estate and $43 billion in corporate holdings.

There is no evidence that Khamenei is tapping Setad to enrich himself but Reuters argues that Setad has strengthened his position. Through Setad, Khamenei has at his disposal extensive financial resources.

As Iran’s top cleric, Khamenei has final say on all governmental matters. His purview includes his nation’s controversial nuclear programme, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended on Sunday without an agreement. It is Khamenei who will set Iran’s course in the nuclear talks and other recent efforts by the new president, Hassan Rohani, to improve relations with Washington.

The investigation into Setad shows that as well as political power and military force there is a third dimension to Khamenei’s power: economic might.

"The revenue stream generated by Setad helps explain why Khamenei has not only held on for 24 years but also in some ways has more control than his revered predecessor," Reuters wrote. "Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran's messy factional infighting."

(FRANCE 24 with wires)

Date created : 2013-11-12

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