Khandouzi’s Hand in the Hands of Economic Corrupts

Khandouzi’s Hand in the Hands of Economic Corrupts

Khandouzi’s hand in the hands of economic corrupts, according to Iran Gate, the release of a letter has led many critics of Ebrahim Raisi’s government to accuse him and especially his Minister of Economy of being involved in economic corruption cases. A letter that caused a massive earthquake in the stock market and funneled unaccounted profits into the pockets of stock market rent-seekers. The responsibility to publicly disclose this letter on time was with the Ministry of Economy and the Stock Exchange Organization, but it has now been revealed that Ehsan Khandouzi and Majid Eshqi deliberately refrained from publishing it.

The public disclosure of the letter approving the increase in petrochemical feedstock prices, which was approved on May 7, has created a serious problem for Ebrahim Raisi’s government. According to capital market experts, this approval led to sales queues by market legal entities, paving the way for a historic drop of nearly 400,000 units in the stock index.

What is the story?

The discussion about increasing petrochemical feedstock prices has been ongoing since the beginning of winter 2023 until just a week ago. Although the government had prohibited petrochemical companies from selling their products at higher prices, increasing the feedstock rate seemed inevitable. It has now been revealed that about 60 days ago, the government entered negotiations to increase the feedstock price, but no news was published in the country’s official media.

The letter, whose release has created a new crisis within Raisi’s cabinet, might even lead to the impeachment of Seyed Ehsan Khandouzi and the dismissal of Majid Eshqi. But what is the reason for these sensitivities, and why should Khandouzi be accountable for such a grave mistake?

In general, companies whose shares are offered on the stock exchange must continuously and uninterruptedly publish all current information of the collection on the Codal system. This fact makes the stock exchange known as the most transparent market whose mechanism has been defined by humans. This is also recognized as a factor in preventing corruption and can significantly help solve root problems in Iran’s economy.

However, the problem arises when some of this information must be disclosed by governments. Among the most important of this information are industrial fuel rates, feedstock rates, tax rates, and exchange rate conversions. This type of information is not separately published on the Codal system because it does not pertain to a specific company and is published in the country’s official media, including government news agencies.

Whose Bowl is Khandouzi’s Hand In?

It should be noted that the responsibility for publishing the approval of the increase in petrochemical feedstock prices lies with the High Council of the Stock Exchange, chaired by the Minister of Economy. But the point is that this letter, despite being finally approved on May 7 of this year, has only recently been published through Telegram channels. In response to this disclosure in cyberspace, the government was forced to confirm the validity of this approval. In other words, Khandouzi made the increase in petrochemical feedstock prices public after 50 days when it was a fait accompli.

It should be noted that increasing the feedstock rate can lead to increased production costs in petrochemical product manufacturing collections. Simply put, increasing the feedstock price for petrochemicals means reducing profit margins and reducing the returns of these companies. This is why shareholders have high sensitivity in this area and consider the secrecy of the Ministry of Economy and the Stock Exchange Organization as against the law.

Khandouzi and Eshqi’s Assist to

The important point is that when we match the date of this approval with the date of the severe stock market crash this year, we realize that both events occurred on May 7 of this year. Understanding the reason for this simultaneity is very simple. The provisions of the approval were provided to legal entities, and stock exchange companies with privileged information suddenly and without any prior warning started selling their shares in petrochemical and automotive companies.

By examining the trend of buying and selling shares on May 7, 2023, it becomes clear that the government’s failure to publicly disclose this approval led to uninformed individual shareholders sitting in the buying queue while legal entities sold their chemical stocks heavily at peak prices. This heavy supply caused the Tehran Stock Exchange not only to be in recession for about two months but also for the overall index to experience a significant drop of nearly half a million units.

Now the main question is why Ebrahim Raisi’s government deliberately took an action that allowed a specific group in the stock market to benefit and pocket tens of thousands of billions of tomans. On the other hand, this astronomical profit has another side: a large number of individual and small shareholders in the capital market have suffered very heavy losses over the past fifty days. A loss that was inconceivable in the conditions of stock market inflation growth and occurred contrary to the logical market trend.

Where is the Revolutionary Parliament?

As mentioned, according to the law, the Ministry of Economy has the direct responsibility to publish and disclose the mentioned information. The Stock Exchange Organization, as the custodian and supervisory body of the capital market, should have pursued the matter to prevent the creation of informational rent for some legal market players. However, evidence suggests that not only Ehsan Khandouzi, as the head of the High Council of the Stock Exchange, did not arrange the necessary actions, but the Stock Exchange Organization also did not fulfill its duties in this regard.

Therefore, now the attention of shareholders, observers, and critics of Ebrahim Raisi’s government is focused on the parliament’s platforms. Because in such conditions where such a glaring error has occurred, the parliament should quickly question the Minister of Economy and even the President and clarify the vast amount of rent that has been distributed as soon as possible. But so far, neither the super-revolutionary parliament representatives have been heard from, nor has Ebrahim Raisi’s anti-corruption government made a sound, as if nothing has happened.