Economy, Business And Markets

Distraint Notice for Iran Zamin Bank Assets

Distraint Notice for Iran Zamin Bank AssetsDistraint Notice for Iran Zamin Bank Assets

In effect of a complaint filed by the Trade Development Intl. Company (TDIC), branch 19 of Shahid Behehsti Judicial complex has ruled in favor of a distraint notice on the assets of Iran Zamin Bank, Mohammad Reza Bouzari TDIC’s attorney announced.

In 2012, Fadak Cultivation and Industry Company (FCIC) made a purchase worth 2.7 trillion rials ($97.5 million at official exchange rate) from TDIC. The latter company is affiliated with Bank Sepah and 100 percent of its assets are provided by the government, news website Banker reported.  

FCIC presented a check for the purchase, an offer which was rejected by TDIC. Next, a surety issued by Molal Movaheddin Credit Institution was offered; however, this option was also dismissed. Finally, both parties agreed to settle the deal with a surety issued by Iran Zamin Bank.

A bank surety is a form of money; the bank that issues the surety must take responsibility for the related organization and receive a certain amount of money as backup in case the organization fails to settle its debt.

In other words, Iran Zamin Bank should have received nearly 4 trillion rials ($145 million) as a pledge; however, even though the paperwork has been done the bank did not even receive a penny from the company.

After paying 1 trillion rials ($36 million) FCIC officially dispatched a letter to TDIC announcing that it cannot settle the debt and that TDIC should refer to Iran Zamin Bank.

A legal case was therefore opened last June after which 300 billion rials of the remaining 1.7 trillion rials were paid in 15 days. Finally it was agreed that by November 2014 the rest of the debt (including the fines for the delayed payback based on central bank standards) would duly be settled.

The company once again failed to settle the debt by January 2014, thus an amendment was issued indicating that the debt should be settled in 12 installments and if the company fails to pay two consecutive or three inconsecutive installments the remaining debt can instantly be claimed by TDIC.

FCIC finally paid back the initial amount of the debt in 12 installments but not the fine which amounted to 860 billion rials ($31 million). Thus, last Wednesday on February 18 the court ruled in favor of the distraint on the assets of the bank.

Judiciary officials and TDIC’s attorney paid a visit to Iran Zamin Bank’s headquarters on Saturday informing them of the newest court verdict. The bank has asked for an extra week to settle the issue, however, if their efforts fail the verdict shall come to effect next Saturday.    

The CEO of Iran Zamin Bank, Kamal Seyedali, immediately reacted to the report. In an interview with Eghtesad News, he expressed surprise that the news has now gone viral throughout media while the complaint was initially filed three years ago.

The CEO clarified that 80 percent of the debt has been paid back and the bank will also duly repay the remaining 20 percent.

He claimed that the incident was not newsworthy and the media has unnecessarily disrupted public minds.