Thursday, October 06, 2011

Iranians fume as banking scandal widens...

A banking scandal, identified by Iranian authorities as the "largest embezzlement in the country's banking history", has further shaken confidence in the government whose legitimacy was already under question after the contested results of the 2009 presidential election.

Various banking officials, including the governor of the Central Bank of Iran (CBI), Mahmoud Bahmani, have scrambled to explain the failure of the oversight system by blaming each other. But the resignation of the chief of the Melli Bank, Iran's largest government-owned bank, his apparent flight to Canada, and the firings of his counterparts at the Saderat and Saman banks have confirmed the seriousness of the scandal.

Even the Supreme Leader Seyed Ali Khamenei felt compelled to weigh into the political blame game. On Monday, he demanded resolute action in punishing violators while sidestepping his own responsibility as the country's religious guide and moral compass by claiming that, had his advice been correctly implemented, "the recent economic corruption would not have occurred."

 But important questions regarding how a relative newcomer to Iran's economic scene was able to access approximately 2.8 billion dollars worth of credit and then use it to establish a bank and buy privatised companies through no-bid processes remain unanswered. Full story...

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