Economy, Business And Markets

Mizan’s State of Turmoil

Mizan’s State of TurmoilMizan’s State of Turmoil

Mizan Credit Institution will be taken over by Bank Saderat, according to deputy governor of Khorasan Razavi, where the firm is based.

Mizan’s board of governors and executives were arrested last week by a court order for failing to reimburse their depositors.

“I have no information about the release of Mizan’s executives,” Mohsen Sadeghi told Tasnim news agency on Monday. “As far as I know, Bank Saderat will take over Mizan governance.”

Mizan is accused by the regulator of violating monetary regulations. It had received countless warnings from the central bank and the economy ministry.

Board members of the uncertified institution were arrested after they missed a court deadline to settle their debts. A judge had given Mizan executives two-weeks to reimburse their depositors, Eghtesad News reported last week, without identifying the judge.

Hamid Tehranfar, deputy governor for supervision in the Central Bank of Iran, had previously told the press that the merger had taken place, prompting some economists to criticize the central bank’s decision.

By forcing troubled credit institutions on banks, the central bank punishes the bank’s shareholders and rewards the wrongdoings of the owners of such institutions, Hossein Abdo Tabrizi a prominent economist  wrote in the Financial Tribune’s sister paper Donya-e-eghtesad in March.

Citing monetary officials, Bourse Press said the institution’s customers do not need to be worried about their deposits any more. The institution, which the regulator said was unauthorized, has long been waiting to be merged with another financial entity.

Auditors of the central bank were said to be examining the deposits held by the Mizan institution. The deposits were to be either repaid or transferred to Bank Saderat if the customers agreed.

Mohammad Reza Movafagh, the economic deputy governor of North Khorasan – another province with substantial investment in Mizan – said earlier that although the central bank favors such a takeover, Mizan’s managers are opposed and want to handle the finances themselves.