Bloomberg News

Iran Bank Chief Quits Over $2.6 Billion Fraud Case, Mehr Says

September 28, 2011

Sept. 28 (Bloomberg) -- The head of Iran’s largest state- owned bank lost his job over a $2.6 billion fraud case, the biggest in the country’s history, the state-run Mehr news agency reported.

The managing director of Bank Melli resigned yesterday after coming under pressure over the embezzlement, according to the report. Mahmoud-Reza Khavari’s resignation was accepted by Economy and Finance Minister Shamseddin Hosseini, said Mehr, which published an extract of Khavari’s letter in its report late yesterday.

In the document, Khavari apologized to Iran’s Supreme Leader Ali Khamenei and to Iranians, saying he was stepping down “to respect public opinion.” He also pointed to Bank Saderat, another major Iranian lender, for its involvement in the wrongdoing. Mohammad Jahromi, managing director of Bank Saderat, may also be sacked, Mehr said, without citing anyone.

Seven state-owned and private banks were linked to the case that involved the forging of letters of credit by an Iranian businessman to secure loans that were then used to purchase state-owned companies, Iranian state-run media have reported.

--Editors: Jennifer M. Freedman, Ben Holland

To contact the reporter on this story: Ladane Nasseri in Tehran at

To contact the editor responsible for this story: Andrew J. Barden at

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