Bonyad-e Sepah-e Passdaran
Bonyad-e Sepah-e Passdaran was founded in 1989, at the end of the Iran-Iraq War. The organization acts as the IRGC’s investment arm and is currently considered to be the fifth largest holding company in Iran. It is involved in various commercial enterprises in the construction, agriculture, energy sector (such as the Kermanshah Petrochemical Plant), telecommunications, banking (such as Ansar Bank) and automotive industries (the Bahman Group and Saipa), among others.
Among the bonyad’s most prominent officials were Mohsen Rafiqdoost, one of the founders of the IRGC, who headed the foundation between 1989 and 1996, and Parviz Fatah. Parviz Fatah ran the Khatam al-Anbia subsidiary company, Sepasad Engineering Company and was Iran’s Minister of Energy during Ahmadinejad’s first presidential term (2005-2009). After his term as minister was not renewed, Parviz Fatah briefly returned to Khatam al-Anbia as the deputy to the manager of the organization. Before he was appointed Managing Director of Bonyad-e Sepah-e Passdaran in November 2009. He ran the bonyad till April 2015 when he was appointed as the head of another Bonyad, the Imam Khomeini Relief Committee. Ahmed Vahid Dastjardi that was appointed in his stead, was formerly head of the Iranian Space Agency and a deputy of the minister of defense. Bonyad Ta’avon Sepah was designated by OFAC (12/21/2010), the EU (23/05/2011) and the Canadian government (November 2011).
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Bonyad Sepah InfoBonyad Sepah Connected toBonyad Sepah Involved InOperational Scheme
# Modus Operandi
Unlike private organizations in Iran, the bonyads are tax-exempt, are not bound by the auditing requirements of Iran’s General Accounting Law, receive favorable exchange rates, and enjoy preferential access to credit. In addition, bonyads are not included in any governmental macro- or microeconomic plans and are answerable to no one but the Supreme Leader. This allows Bonyad Ta’avon Sepah to hide effectively behind a complex web of corporate shells and subsidiaries. This modus operandi both shows the challenges of due diligence when it comes to Iran as well as the dangers those who want to do business in Iran, maybe exposed to. In addition, it is important to note that while not always owning the Companies (i.e. owning over 50% of the shares), Bonyad Taavon Sepah or his subsidiaries and affiliates combined or solely constitute the controlling share owner or owners. Moreover, in some cases (as will be shown), the bonyad cooperates in its business dealings and holdings with other state owned commercial entities (like EIKO (Executive Headquarters of Imam’s Directive) and the Basij) which, like Bonyad Taavon Sepah try to hide behind shell corporations or a complex web of other commercial entities. Thus, effectively placing a large part of the Iranian economy under the control of the Iranian regime (future reports will deal with these other entities).
# Bahman Group
An excellent example of the way Bonyad Taavon Sepah manages to maintain a commanding, yet clandestine, influence on the Iranian economy is that of the Bahman Group, one of the prominent car manufacturers in Iran. The group’s main activities concentrate in the automotive industry, it is a licensed vehicle manufacturer of the following brands: Mazda, Isuzu, Faw, ZXAUTO, Tmec. Among its clients in Iran, the group has contracts with government ministries as well as the armed forces (army as well as IRGC). Also, the group through its subsidiary, ParsBoschung, provides and installs multipurpose machinery used for road and airport maintenance. Among ParsBoschung’s business partners, are various European companies such as the Swiss Company Boshung (which also owns 3.625% of ParsBoschung’s shares), Italian companies such as: OFTMB, ETD, AMCO VEBA, ASSALONI, Turkish Companies such as: HYDROMAC and French companies such as: ACOMETIS. In addition, the Bahman Group is also active in the telecommunications and energy sectors. In fact, as will be further shown, the group played a pivotal in the IRGC’s takeover of the telecommunications industry in Iran.
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At least as early as 2005, the Bahman Group was under the direct control of Bonyad Sepah. According to a financial report carried out by the “Fater Accounting Company” (the official accounting firm of the Iranian Securities and Exchange Organization), dated December 12, 2009, Bonyad Sepah was the majority shareholder of the group, directly owning 45.43% of the group’s shares. In addition, according to the same report, “Ghadir Investment Company” (designated by OFAC) owned 10.41% of the Bahman Group.
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Since late 2009 and especially since Bonyad Sepah’s designation by OFAC (12/21/2010), control over the group has periodically been shuffled between various subsidiaries which are linked, one way or another, to the IRGC. In 2011, Bonyad Sepah no longer appears among the group’s shareholders. According to financial reports from March 2011, the following companies are the majority shareholders: Tajali Samaneh Investment Company (Sarmayeh Gozari Tajali Samaneh) 25%, Negin Sahel Royal Investment Company (Sarmayeh Gozari Nehin Sahel Royal) 14.1% and Ghadir 9.42%. The percentage of shares each Company held, remained roughly the same in 2012 as well.
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Tajali Samaneh, is affiliated with a subsidiary of Mehr Eqtesad Bank, Which is a designated entity affiliated with the IRGC and owned by the Basij’s bonyad. The Negin Sahel Royal Investment Company is also affiliated with Mehr Eqtesad Bank. In Addition, the members of the board of directors of the Bahman group in 2011 consisted of Companies and individuals affiliated with Bonyad Ta’avon Sepah such as Tose’e-ye E’temad-e Mobin (one of the companies which purchased in 2009 the Iranian Telecommunications Company (TCI). For more information see section on the telecommunications), Sharyar Mahestan (another Company linked TCI’s Purchase). Sharyar Mahestan’s representative in that was Masoud Mehrdadi, who was also a member of Bonyad Sepah’s board of directors and is considered to be the financial “brain” behind the IRGC’s economic empire. Ghadir, as mentioned was designated by OFAC.
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While in 2012, the shareholding remained the same, there were some changes in the board of directors. The most curious of these changes was that now Masoud Mehrdadi was Tajali Samaneh’s representative in the board of directors. In January 2013, Negin Sahel Royal’s board of directors was composed of Tajali Samaneh, Tadbirgaran Atiyeh Iranian (a company established and owned by the Basij’s Bonyad) as well as Mehr Eqtesad Iranian. The latter is an interesting example which further demonstrates the complexity of the IRGC’s business structure.
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By March 2014, there was another shuffling of shareholders. While Negin Sahel Royal increased its holdings to 16.13% of the Bahman Group’s shares, a new majority shareholder appears. The new majority shareholder, Mehr Eqtesad Financial Group (Guruh Mali Mehr Eqtesad), which is affiliated with Mehr Eqtesad Bank, now held 27.42% of the shares, almost the exact same percentage of shares the Tajali Samaneh Investment Company held in 2012 (24.1%).
Bahman Group shareholders – 2014
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On March 2015, once again there was a re-shuffling of Bahman Group’s controlling shareholders. In wake of this re-shuffling, 27.72% and 25.6% percent of the shares are respectively owned by Fan Pardazan Bahman Company and Andisheh Farda Investment Company. It seems that the two that own more than 50% of Bahman Group’s shares (i.e. Andisheh Farda Investment Company and Fan Pardazan Bahman), may be in fact owned by the Bahman Group. According to financial records from September 2011, Fan Pardazan Bahman Company was a subsidiary of ‘Asr-e Bahman which is in turn a subsidiary of the Bahman Group. Fan Pardazan Bahman Co. (27.41%) and Andishe Fardah Investment Company (25.62%) – are both owned by Bahman Group itself. The identity of the board of directors, however, reveals IRGC control over the company.”
Testimony Before the U.S. House Committee on Foreign Affairs, Middle East and North Africa Subcommittee, “The Iran Nuclear Deal and its Impact on Iran’s Islamic Revolutionary Guards Corps,”
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The March 2015 re-shuffling of the majority shareholders also left some investors in Iran baffled as there was apparently no official announcement regarding this change. Some have also raised the issue of who actually controls the Bahman Group. Out of the five companies that comprise the Group’s board of directors (as of May 2016), four are affiliated with the IRGC: Negin Sahel Royal, Tadbirgaran Atiyeh Iranian, Andisheh Mehvaran, Khodrosazan Dieseli Azerbaijan. The latter Company is a subsidiary of the Iran Tractor Manufacturing Company (Sherkat Tractorsazi-ye Iran), a subsidiary of Mehr Eqtesad Iranian Investment Company.
Testimony Before the U.S. House Committee on Foreign Affairs, Middle East and North Africa Subcommittee, “The Iran Nuclear Deal and its Impact on Iran’s Islamic Revolutionary Guards Corps,”
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In addition, the Bahman Group’s board of directors (acting on behalf of Khodrosazan), Ghollamhussein Taqi Nataj Molkshah, is also the deputy chairman of Mehr Eqtesad Bank’s board of directors. As for Andisheh Mehvaran Investment Company, it is a subsidiary of the Iran Zinc Mines Development Company. The latter’s board of directors is controlled by the following entities: Bahman Group, Mehr Eqtesad Bank, Negin Sahel Royal and Tadbirgaran Atiyeh Iranian. In addition, these four companies along with Andisheh Mehvaran control 49.93% of Iran Zink and Mines Development Company Shares.
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Bahman Group is added to the Specially Designated Nationals (SDN) list maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) on 10.16.2018 pursuant to Executive Order 13224, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, Andisheh Mehvaran Investment Company;
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Andisheh Mehvaran Investment Company is designated by OFAC pursuant to E.O. 13224 for being owned or controlled by Iran Zink and Mines Development Company, and also for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, IZMDC;
# Telecommunications
In September 2009, 50% plus one share of the shares of Iran Telecommunication Company (TCI, in Persian – Sherkat Mokhaberat Iran) were offered to the public. The shares worth about 7.8 Billion dollars were in the space of a half an hour (in what was the largest transaction ever to take place in the Iranian stock exchange), by a consortium called Tose’e-ye E’temad-e Mobin. The consortium which bought TCI’s controlling shares, was comprised of three companies: Tose’e-ye E’temad Investment Company, Shaharyar Mahestan and Iran Mobin (Gostaresh Electronic Mobin Iran). The shareholding was divided between the three companies in following manner: Tose’e-ye E’temad Investment Company – 46%, Shaharyar Mahestan – 8%, Iran Mobin controls the remaining 46% shares of the consortium. At the time, the consortium denied any IRGC presence among its shareholders. However, it seems that both companies are affiliated with the Bahman group. According to financial reports from December 2007, the Bahman Group owned 59.9% of Tose’e-ye E’temad Investment Company’s shares. In addition, at the time the consortium purchased TCI’s controlling shares, Tose’e-ye E’temad Investment Company’s board of directors was comprised of companies which are subsidiaries of the Bahman Group. As for Sharyar Mahestan, it is also affiliated with both the Bahman Group and Bonayd Sepah. Both Tose’e-ye E’temad Investment Company and Sharyar Mahestan were members of the Bahman Group’s board of directors in 2011 and 2012 (Sharyar Mahestan’s representative in the board was Masoud Mehrdadi). On August 15, 2015 Fars news agency, considered to be the semi-official news agency of the Iranian Government, referred to both companies as subsidiaries of Bonyad Sepah. As for Iran Mobin, according to various media reports, Iran Mobin is in fact affiliated with the “Executive Headquarters of Imam’s Directive”.
Thus, in what was ostensibly a move to privatize the communications Company, which is Iran’s fixed-line operator, the IRGC as well as the supreme leader were able to take control over the Company. By controlling TCI and its subsidiary companies, the IRGC is able to control not only Iran’s fixed-line communications but also Iran’s largest cellular phone operator (MCI) as well as internet provider. In addition, TCI in May 2012, bought Talya, a company which controls a pre-paid mobile network in Iran (which utilizes software as well as hardware products made by, among others, Siemens, Alcatel and Ericsson).
# Conclusions
- While this report only deals with one business enterprise which is controlled by the Bonyad, it offers a peak into the IRGC’s various inroads and hold over various sectors of the Iranian Economy
- More importantly, this report demonstrates some of the complex and sophisticated methods used by the IRGC in order to hide its financial holdings as well as its business dealings in Iran
- In addition, this report shows that various entities affiliated with the IRGC, the Basij as well as the supreme leader, Ayatollah Ali Khamenai, cooperate in their various business dealings
- This modus operandi of hiding behind a complex web of subsidiaries, re-shuffling of shareholders, changing control over the board of directors and more, makes it extremely difficult to understand who really controls commercial entities in Iran and whether they are affiliated or not with designated entities and individuals
- Indeed, as shown, this method seems to not only baffle those outside of Iran but also investors inside Iran
- What is clear, that companies wishing to do business in Iran will have to commit serious resources in order to properly do their due diligence before entering any business transaction with any Iranian commercial entity
- Western companies mentioned above in the automotive and telecommunication sectors actually doing business with the IRGC, supporting directly and financing Iran’s terror activity, WMD and violations of human rights
