Kruz Company's Presence on Iran Khodro Board Declared 'Illegal'

A few days after the controversial transfer of ownership of Iran Khodro to the Kruz parts manufacturing group, the Competition Council issued a statement declaring that Kruz's presence on the board of Iran Khodro is 'illegal.' On Tuesday, February 23, the Competition Council emphasized the 'lack of eligibility' of Kruz and the 'illegality' of this company's presence on the board of Iran Khodro through a resolution. This resolution states that despite a letter dated February 16 from the Deputy Attorney General and the decision of the CEO and Chairman of the Board of Iran Khodro to refrain from holding a general assembly until the Competition Council's appellate ruling is finalized, Kruz-affiliated shareholders 'illegally held a meeting unilaterally and without the presence of representatives from the state sector on the board of Iran Khodro.' In the mentioned assembly held on February 17, Kruz seized three out of five managerial positions at Iran Khodro and will thus take control of Iran Khodro's management. The decision of the Iran Khodro assembly to transfer ownership to 'Kruz' has faced widespread criticism from some members of parliament and experts. Alimardan Azimi, CEO of Iran Khodro, sent a letter to the Iranian Securities and Exchange Organization, reporting 'violations' in the general assembly's proceedings and stating that 'the Securities Organization should not approve the transfer of Iran Khodro to the private sector.' The state news agency IRNA also reported that Farshad Moghimi, Deputy Minister of Industry, Mines, and Trade, had told Iran Khodro shareholders before the assembly to halt the meeting for the company's transfer. The transfer of Iran Khodro to Kruz comes at a time when this parts manufacturer is facing multiple legal cases ranging from monopoly and price gouging to bribery and organized smuggling of auto parts. Furthermore, Iran Khodro had accumulated approximately 128 trillion tomans in losses by the end of December this year, and despite this, Kruz had even proposed to buy a block of Iran Khodro's shares at a price of 480 tomans per share, while the current price of each Iran Khodro share on the Tehran Stock Exchange is close to 345 tomans.