Following years of judicial and legal wrangling over the process leading to the privatization of Haft Tappeh Sugarcane Agro-Industry Company, supervisory bodies reversed the controversial privatization of the giant sugarcane company in south Iran.
The semi-official Fars News Agency reported Saturday that the privatization project was corrupted and blatantly violated the provisions of Principle 44 of the Constitution that provides guidelines on government downsizing and allowing enough space for private enterprise and cooperatives.
Judicial and supervisory bodies, including the General Inspection Organization of Iran, affiliated to the judiciary and the Supreme Audit Court, affiliated to the parliament, were involved in reexamining the seriously flawed privatization case.
A court issued a ruling based on which the ownership of the major sugarcane company has been returned to government management -- a demand of the workers who have been protesting since 2015 against the new bosses they claim are unfit for the job.
Located in Shoosh in southwestern Khuzestan Province, Haft Tepeh is the biggest sugarcane farm in Iran. It was founded in 1958 and became fully operational in 1961 mandated to farm sugarcane and other agricultural and dairy products, and develop the relevant industries. The giant agriculture holding produces sugar, alcohol, wheat, barley, kraft paper, industrial coal, molasses, and bagasse.
Privatizing Haft Tapeh was seemingly one of the controversial privatization projects of the Rouhani administration. Soon after it was ceded to a private owner in 2015, the company witnessed sporadic strikes and protests against poor working conditions and lengthy delays in wages of the 5,000 workers.
The often clamorous protests attracted media attention and compelled authorities, in particular the judiciary, to look into the mounting complaints against the company’s mismanagement and investigate charges of nepotism and corruption in the privatization process.
The privatization was rolled back after in-depth investigations showed that basic privatization rules were ignored and the buyer was unqualified, Mohammad Ka’b Amir, an MP from Shoosh in Khuzestan Province said.
As for misdemeanors, Ka’b Amir referred to the outcome of the investigation and said the mega company had been given away almost for free, which gave rise to the likelihood that buyers had connections to higher-ups and were involved in rent-seeking.
“Ambiguities in determining the base price, absence of proper qualification assessment and violation of basic privatization rules were among the faults found in the investigations,” he was quoted as saying by IRNA.
Moreover, the new owner(s) failed to expand and improve the efficiency of the company, he added.
The company failed to meet its forex commitments to the government to the tune of €9.9 million and had unpaid debts of 674 billion rials to the Industrial Development and Renovation Organization of Iran, the lawmaker said.
In the past two decades successive governments have tried to relinquish ownership in several state-run companies to improve their efficiency and profitability and create space for the private sector to be able to play a bigger role in the economy.
