Setad

Setad (short for Persian: ستاد اجرایی فرمان امام‎‎, Setade Ejraiye Farmane Emam, lit. "The Executive Headquarters of Imam's Directive") known as The Execution of Imam Khomeini's Order aka EIKO is a government body under direct control of Supreme Leader of Iran. It is multi-sector Iranian business organization in the Islamic Republic of Iran, with holdings of 37 companies, and an estimated value in 2013 of $95 billion (made up of about $52 billion in real estate and $43 billion in corporate holdings). It is under the control of the Supreme Leader, Ali Khamenei, and created from thousands of properties confiscated from Iranians.

Setad was supposedly created to help the poor and war veterans and was meant to exist for just two years. Almost a quarter-century on, Setad has morphed into a business juggernaut with real estate, corporate stakes and other assets. Under Khamenei, the organization has expanded its corporate holdings, buying stakes in dozens of Iranian companies, both private and public. The organization has been described as "secretive" and "little known".

It is not overseen by the Iranian Parliament, as that body voted in 2008 to "prohibit itself from monitoring organizations that the supreme leader controls, except with his permission". It is, however, an important factor in Khameni's power, giving him financial independence from parliament and the national budget, and thus "insulating him from Iran's messy factional infighting". According to an investigative report by Reuters news agency, the "revenue stream" provided by Setad, "helps explain why Khamenei has not only held for 24 years but also in some ways has more control than even his revered predecessor". Khamenei, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad.

The Reuters report said, there was no evidence that Khamenei was tapping Setad to enrich himself. However the Reuters report noted that it's difficult to pinpoint the organization's total worth because of the secrecy of its accounts. Iranian authorities have stated the findings of the Reuters investigation lack "any basis", are "far from realities" and "not correct," but given no further details. In 2009, British banks froze $1.6 billion in funds belonging to Ali Khamenei's son. According to leaked reports in 2011, Ali Khamenei had $36 billion in bank accounts abroad, and his son Mojtaba had $21 billion in bank accounts abroad. Various other Khamenei family members also was revealed to have hundreds of millions of dollars stashed away in a bewildering array of foreign banks and financial institutions. Finally in 2015, Khamenei claimed he had a personal net worth of only $150 million.

History

The organization launched in April 26, 1989 about a month before the death of Ruhollah Khomeini when he issued a verdict to Habibollah Asgaroladi, Mehdi Karroubi and Hassan Sane'i for taking control of all the money and property which by implementation of Article 49 of Constitution of Iran and other laws are under control of the Supreme Leader of Iran. The committee by this order became free to manage, maintain or sell properties, revenues and confiscated assets after the 1979 Islamic Revolution in different charity organizations like Foundation of Martyrs and Veterans Affairs, State Welfare Organization of Iran or to partially pass their control to Ministry of Economic Affairs and Finance (Iran).

After the death of Ruhollah Khomeini, Mohammad Shariatmadari was appointed by Ali Khamenei as chief of EIKO and then in 1997 Mohammad Javad Iravani took over this position. Mohammad Mokhber is acting as CEO of Setad from 2007.

Mohammad Mokhber, President and CEO of EIKO

Almost a quarter-century on, Setad has morphed into a business juggernaut with real estate, corporate stakes and other assets. Under Khamenei, the organization has expanded its corporate holdings, buying stakes in dozens of Iranian companies, both private and public. Khamenei, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad.

In 2006, as sanctions against the Islamic Republic intensified, the organization determined that conglomerates such as the South Korean Chaebol helped developing economies grow faster. To make a conglomerate out of Setad, the organization set out to acquire other companies and stakes in other companies. According to Reuters the organization acquired a stake in "a major bank" in 2007 and in "Iran's largest telecommunications company" in 2009. In 2010 it took control of Rey Investment Co, valued by the US Treasury Department at $40 billion that year.

Setad maintains a complex network of front companies and subsidiaries abroad in places like Germany, Croatia, South Africa, the UAE, Turkey and beyond. It stakes in publicly traded companies totaled nearly $3.4 billion.

Reuters reported that petrochemical companies belonging to Setad could benefit from the easing of sanctions stemming from the Geneva interim agreement on Iranian nuclear program.

An investment firm that Khamenei controls has been accused of forcibly taking over an Iranian company that is Iran’s biggest dealer of German automobiles.

Legal Status

There is ambiguity and contradiction in Iranian laws for confiscated assets.

Originally under Article 49 of the Iranian constitution, the government is obliged to confiscate illegal wealth and return to its owner and if uncertain of the original owner to give it to the treasury.

By the implementation law of Article 49 of the Iranian constitution ratified by Parliament of Iran in 1984, when Akbar Hashemi Rafsanjani was speaker of the parliament, treasury replaced by Supreme Leader of Iran. This law transferred the right to control huge part of public assets to another entity which is outside government in direct control of Supreme Leader of Iran.

On the other hand, Organization for Collection and Sale of State-owned Properties of Iran is name of a legal body affiliated to the Ministry of Economic Affairs and Finance (Iran) which has its own establishment law ratified by Parliament of Iran in 1992 when Mehdi Karroubi was speaker of the parliament. Although this law clearly transfer back control of confiscated assets to the government but it is never implemented mainly due to circulars issued by chief justice Mahmoud Hashemi Shahroudi like on 2009 and then by chief justice Sadeq Larijani on 2013. Chief justice in Iran is appointed by Supreme Leader of Iran based on Article 110 of Iranian constitution.

EIKO cooperation with Army of the Guardians of the Islamic Revolution

EIKO and IRGC which are both under control of Supreme Leader of Iran have cooperation in different fields in recent decades.

Purchasing 51% of shares of Telecommunication Company of Iran (TCI) by Mobin Trust Consortium (TEM) which owned by EIKO and IRGC is among the biggest deals in Iran's history.

See also

• Economy of Iran
• Bonyad

External links

• Organization chart of Setad