New rules in largest state-affiliated conglomerate
Iran Weekly Press Digest
July 29, 1999
The new head of Iran's largest state-affiliated conglomerate pledged
to introduce sweeping changes to the multi-billion-dollar group that has
been beset by charges of inefficiency and allegations of corruption. Mohammad
Forouzandeh, named last week to head the Foundation for the Deprived and
War Disabled, said it planned to sell loss-making businesses and take
up more lucrative ventures.
The Foundation, or Bonyad-e Mostazafan va Janbazan, oversees extensive
properties confiscated from the former royal family and associates after
the 1979 Islamic revolution. It values its business holdings at up to
$3.5 billion. Set up as a charity to care for the poor, it is one of Iran's
revolutionary foundations that act independently of the government and
answer to supreme leader Ayatollah Ali Khamenei.
"Some firms are not making profits. They can be transferred (to
the private sector) and the money can be invested in more lucrative areas,"
Forouzandeh, a former defence minister with impeccable revolutionary credentials,
said late on Wednesday.
"Discipline, precision and speed is my motto. Decisions will be
made based on logical and economic, not political grounds. We will make
use of those with merit. Meritocracy is the criteria," he said at
a ceremony to mark his new post.
The foundation, a stronghold of conservative opponents of reformist
President Mohammad Khatami, has faced repeated charges in Iranian newspapers
of mismanagement and corruption. Much criticism followed the 1995 conviction
of a brother of its former head Mohsen Rafiqdoust in a large bank fraud
The incident led Khamenei to appoint a board of trustees to curb Rafiqdoust's
hitherto absolute control and brought the foundation under parliamentary
scrutiny. The Bonyad has also come under attack for allegedly failing
to meet the needs of many disabled veterans of the 1980-88 Iran-Iraq war,
held in high regard in the Islamic republic.
Rafiqdoust, speaking at the ceremony, defended his performance.
"There is only so much that the Bonyad can do. We cannot do it
alone. Others who should have paid attention, did not and only paid lip
service," he said, in an apparent reference to government welfare
He later told journalists that the foundation's assets, excluding properties
not directly contributing to its business ventures, had risen to 10.4 trillion
rials, from 778 billion rials 10 years ago when he took charge.
The current figure is worth about $3.5 billion at the rial's official
exchange rate, but a third of that on the black market. He did not give
a profit figure for the foundation.
The foundation has about 300 companies under its wing, ranging from
food processing to construction and tourism. It owns 43 percent of Iran's
hotels and runs about half of Iran's tourism, its own statistics show.
The foundation has set up its own credit institution, which is not answerable
to the central bank, and engages in foreign deals and investments, especially
in the Middle East. It provides 123,000 war disabled with homes, medical
care, education and help to find jobs, and assists many poor people unable
to cope with Iran's growing economic troubles.
Its toughest task has been to arrange expensive care for thousands
of war veterans suffering after Iraqi chemical attacks. Despite its wide
responsibilities, many complain the foundation is given more privileges
than it deserves. The foundation's firms enjoy tax breaks and preferential
government hard currency rates. It is also easier for them to win state