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Billionaire To Be Hanged After Government Collects Its Money

Convicted Iranian tycoon, Babak Zanjani attending a court hearing. 2015

A senior official of Iran’s Judiciary has said on December 13 that former tycoon, Babak Zanjani will be executed after he returns what he owes the Islamic Republic.

Zanjani who was arrested in 2013 on charges of embezzling money earned from black market oil exports sanctioned by the government, was sentenced to death in 2016.

Hadi Sadeghi, a deputy to the all-powerful Judiciary head told reporters in city of Bojnourd, that part of Zanjani’s money is abroad and currently it is not possible to repatriate it, according to major Tehran news agencies.

“People should not be impatient with carrying out Zanjani’s death penalty. The Judiciary does not want to lose the connection to his assets abroad.”

It is not clear why the government is unable to collect Zanjani's money abroad. Is he refusing to pay or the funds are out of reach because of U.S. banking sanctions on Iran.

Zanjani was a middleman, selling Iranian oil through companies, mainly affiliated with the Islamic Revolution Guards Corps (IRGC), in the years when international sanctions restricted Iran oil exports and banking relations, during Ahmadineja’s second term, 2009-2013.

Babak Zanjani appears during a court session in Tehran, November 17, 2015
Babak Zanjani appears during a court session in Tehran, November 17, 2015

Under international sanctions, ultraconservative President Mahmoud Ahmadinejad, with Ayatollah Ali Khamenei’s blessing, allowed the private sector, as well as security organizations such as the police to sell oil in international markets, as proxy to the embattled Islamic Republic of Iran.

Zanjani and other individuals set up elaborate networks for selling oil and laundering the money around the world, including in Turkey, United Arab Emirates, Indonesia and Central Asia.

But in many cases the scheme turned into a fiasco, as many plots were uncovered, and people were pursued by the United States. In Zanjani’s case, it was the Iranian government that went after him, because he allegedly pocketed a lot of the money from the oil sales instead of returning it to the government.

The amount of money involved is in billions of dollars, but no one exactly knows how much. The Iranian government fixed the amount at $2.7 billion for Zanjani and confiscated his assets in Iran, but apparently that covered only 20 percent of the debt.

President Hassan Rouhani’s Oil Ministry has accused Zanjani of receiving “one million barrels” of oil from Iran’s National Oil Company (NIOC) for more than $3 billion, but only payed back $190 million, pocketing the rest.

Zanjani’s debt was earlier estimated roughly at $1.8 billion. Nevertheless, Iran Oil Ministry officials have demanded a compensation for “damages”, as well.

Oil Minister, Bijan Namdar Zangeneh said in July, “Zanjani’s total debt, including its interests, amounts to $3.5 billion.”

Given Zanjani’s high-level connections and the involvement of the IRGC, many Iranians believe there is more to this case that meets the eye. Who else in the upper echelons of Iran’s leadership benefited from the sanction-busting schemes? Will Zanjani ever be hanged if he has compromising information on powerful people?

The Islamic Republic’s prosecutor-general insisted in July that Zanjani will “definitely” be hanged. But these kinds of statements should be seen in their political context.

Zanjani in his heydays as benefactor of Iranian cinema. Undated
Zanjani in his heydays as benefactor of Iranian cinema. Undated

Iran has been rocked by serious protests since last December and one major grievance of protesters has been corruption. Iran’s Supreme Leader Ali Khamenei has repeatedly called for punishing speculators and those who harm the economy by illegal activities.

Dozens of forex traders have been arrested and two were hanged in October; but no one from the powerful state or military elite, despite widespread belief that state officials and institutions are mired in corruption.