Economic criminals have the upper hand in embezzlement
The release of a letter has led many critics of Ibrahim Raisi’s government to accuse him, especially his Minister of Economy, of being involved in economic corruption cases. The letter caused a major earthquake in the stock market and poured unaccounted profits into the pockets of stock market rent-seekers. The responsibility for timely publicizing the letter was supposed to lie with the Ministry of Economy and the Stock Organization, but it has now become clear that Ehsan Khandozi and Majid Eshaghi deliberately refrained from releasing it.
The public disclosure of the decision to increase the feed rates for petrochemicals, which was approved on April 27th, has caused serious trouble for Ibrahim Raisi’s government. According to market experts, the decision was a factor in creating selling queues by market participants, which laid the groundwork for a historic drop in the stock market index, approaching 400,000 units.
What is the story?
The issue of increasing the feed rates of petrochemicals has been raised since the beginning of winter 1401 until just last week. Although the government had prohibited petrochemicals from selling their products and productions at higher rates, it seemed certain that the feed rates would also increase. Now it has become clear that the government entered into negotiations for increasing the feed rates about 60 days ago, but no news has been published in the official media of the country regarding this matter.
The letter that has caused a new crisis in the main body of the cabinet and may even lead to the impeachment of Seyyed Ehsan Khandouzi and the dismissal of Majid Eshghi. But what is the reason for these sensitivities and why should Khandouzi be held accountable for such a serious mistake?
In general, companies whose shares are listed on the stock exchange must continuously and without interruption disclose all current information of the organization in the Codal system. This fact makes the stock exchange known as the most transparent market, which human beings have defined its mechanism so far. This is also recognized as a factor in preventing corruption and can greatly help address fundamental problems in the Iranian economy.
However, the problem arises when some of this information needs to be disclosed by governments, including the most important information such as fuel rates, industrial feed rates, tax rates, exchange rates. These specific pieces of information are not published separately on the Codal system because they are not specific to a particular company and are published in official media outlets such as government news agencies.
Whose hand is in the cookie jar?
It should be noted that the responsibility for publishing the decision to increase petrochemical feed rates lies with the Supreme Council of the Stock Exchange, headed by the Minister of Economy. However, the point here is that this letter has recently been published through Telegram channels, despite its final approval in May of this year. The government was also forced to confirm the validity of this decision in response to this disclosure on social media. In other words, after 50 days, the hand in the cookie jar has openly announced the approval of the increase in petrochemical feed rates, which has already been implemented in practice.
It should be noted that an increase in feed rates can lead to an increase in production costs in petrochemical facilities. In simpler terms, an increase in feed prices for petrochemicals means a decrease in profit margins and reduced efficiency for these companies. This is why shareholders are highly sensitive to this issue and consider the concealment of information by the Ministry of Economy and the Stock Exchange Organization as illegal.
Pas Gol Khandozi and Eshghi to
The important point here is that when we compare the date of this decision with the date of the heavy fall in the stock market this year, we realize that both events occurred on May 6th of this year. The reason for this simultaneity is very simple: the content of the decision was made available to legal entities, and stock market companies that have access to informational rent suddenly and without any prior background have sold their shares in petrochemical and automotive companies.
By examining the trend of buying and selling stocks on 6th May 2023, it becomes clear that the non-public disclosure of this decision by the government has caused real shareholders who were unaware of it to sit in the buying queue, while institutional investors sell their chemical stocks heavily at the price ceiling. This heavy supply leads to the Tehran Stock Exchange not only experiencing a recession for the past two months but also facing a significant decline in the overall index, close to half a million units.
Now the main question is why did the government, knowingly, take action that benefits a specific group in the stock market and allows them to pocket profits of tens of trillions of Tomans? On the other hand, this astronomical profit has a downside as well. Many individual and small-scale capital market shareholders have suffered significant losses in the past fifty days, losses that were unimaginable for anyone in the inflationary growth trend of the stock market and contrary to the logical market trend.
Where is the revolutionary parliament?
As mentioned, according to the law of the Ministry of Economy, the organization of the stock exchange, as the responsible authority and market regulator, has the direct responsibility for the publication and disclosure of the mentioned information. However, it seems that not only Ehsan Khodadouzi, as the head of the Supreme Council of the Stock Exchange, has not taken the necessary actions, but also the stock exchange organization itself has not fulfilled its duties in this regard.
That is why now the shareholders, regulators, and government critics are looking towards the tribunes of the parliament. In such circumstances, where such a gross error has occurred, the parliament should quickly demand accountability from the Minister of Economy and even the President, and clarify the extensive division of rent that has taken place. However, so far there is no news from the revolutionary representatives of the parliament, nor does the anti-corruption government of Ebrahim Raisi make any sound, as if neither Khan has gone nor Khan has come.
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