Details of Embezzlement and Financial Corruption in Shasta Revealed; Investigative Committee Sends Case to Judiciary

The head of the investigative committee for the Social Security Investment Company (Shasta) pointed out numerous cases of embezzlement and financial misconduct within the company's subsidiaries, announcing that with the approval of members of the Islamic Consultative Assembly, the economic commission's report on the matter has been sent to the judiciary. Shasta is an investment holding that began operations in 1986 and currently, over 10% of the total market value of the Tehran Stock Exchange belongs to its subsidiaries. According to Mehr News Agency on Tuesday, May 15, the economic commission's report pertains to over a decade of investigation into the Social Security Investment Company (Shasta) and its subsidiaries. The report emphasizes that due to 'weak oversight mechanisms,' there is no record of 'the performance of CEOs and mid-level managers in Shasta,' which has allowed 'some accused of misconduct in subsidiary companies to operate freely in economic activities' and even 'hold managerial positions.' The investigative committee reported that companies such as 'Isfahan Steel, Rightel, Shipping Company, Iran Sazeh, Rasa Daru, Ghadir Petrochemical, Fanavaran Petrochemical, Pasargad Oil, Iranol Oil, Baraz Industrial Group, Tabas Coal, Sabir Company, and Gas Pipe Company,' which 'were established with public investment,' fall under Shasta, yet this conglomerate claims to be 'private sector' and 'not subject to government oversight.' Ali Khazarian, head of the investigative committee, referred to instances of misconduct within Shasta's subsidiaries, including Isfahan Steel, which has incurred an annual 'loss of $150 million.' He noted that 'the purchase of pellets under the pretext of a shortage of iron-bearing materials is one of the significant deviations in Isfahan Steel that has no economic or technical justification,' and 'this deviation in purchasing and operation has been a cover for other issues.' According to this member of the Parliament's Article 90 Commission, losses due to 'technical faults and the significant silence of quality control and laboratory sections' alone from 2018 to 2020 are 'estimated to be about 1 trillion tomans.' Khazarian also stated that 'the loss due to increased imports of coal and coke' between 2018 and 2021 'without calculating transportation costs and tariffs' is about '14.5 trillion tomans,' adding that 'on average, at least $150 million in losses has been incurred annually for Isfahan Steel.' He also mentioned the purchase of imported equipment at Isfahan Steel by a foreign private company named 'Remco,' whose CEO was previously 'the sales deputy of Isfahan Steel' and now lives in Germany and holds Omani citizenship. Khazarian stated that 'in reports, Isfahan Steel experts referred to Remco as the 'trust company of Isfahan Steel.' The head of the Shasta investigative committee also introduced the operator 'Rightel' as a 'safe haven for governments' to 'cover ongoing and personal expenses,' which has brought it to its current deplorable state due to 'the grip of a quasi-security circle.' He pointed out the 'lost rights of Rightel's communication service company,' stating that these rights are 'assets that have been transferred for free' to a company called 'Farabord Dadehaye Iranians,' and 'the occurrence of fraud due to concealment and betrayal of trust' in this action is 'evident,' as 'strange money laundering cases' have been observed in this company. According to Khazarian, Rightel in 2013 'purchased unnecessary and incomplete equipment' worth nearly 28 million euros from 'Huawei,' although current Rightel managers claimed that '25% of this equipment has been used in 'replacement projects.' Khazarian also referred to the misconduct of the Islamic Republic Shipping Company, stating that the 'financial deputy' of this company 'colluded with some others' between 2015 and 2019, having 'suspicious financial transactions' that 'a complaint is currently underway at the Government Employees Prosecutor's Office.' He stated that 'the outstanding debt from unauthorized withdrawals by the then-financial deputy of the shipping company is nearly $15.5 million and '100,000 euros,' and despite 'numerous and repeated follow-ups,' this case has not yet led to an indictment. 'Efforts to avoid paying a 400 billion toman debt' in the case related to the pharmaceutical company 'Rasafarmad,' 'misconducts of $59 million at Ghadir Petrochemical,' 'payment of a 2 million euro claim by Wilmots from the public's pocket,' 'the rapid rise of offenders in Pasargad Oil,' 'a 60 billion toman debt of Pegah Razmavar from the 1980s,' and 'group misconduct in the Baraz Industrial Group' are other instances of misconduct revealed during the investigation of Shasta. Widespread financial corruption in 'Shasta' has been ongoing for over a decade and has repeatedly made headlines over the years. Multiple large-scale financial corruption cases at high levels of the Islamic Republic are underway while poverty and livelihood issues stemming from this have led to widespread occupational protests that occur daily.