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Iran’s Armed Forces’ Attempt to Control Automotive Industry, Leaked Documents Show

iran khodro car depot
A car depot owned by the Iran Khodro Company (IKCO)

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On Tuesday, February 13, the dissident group GhiamSarnegouni (Persian for Rise to Overthrow) breached the Iranian regime’s parliamentary systems. It released a collection of classified documents on its Telegram channel and X account. One of these files reveals how the regime’s armed forces, through the Supreme Leader’s Office and the Presidency, seek to infiltrate the management of the automotive industry, one of the country’s most lucrative sectors.

According to the disclosed documents from the parliament’s system breach, the Deputy for Strategic Affairs and Supervision at the General Staff of the Armed Forces, in a letter to the Supreme Leader, deemed the transfer of managerial positions at Iran Khodro to the Crouse Company and the sale of 33.36% of Iran Khodro’s shares by the Export Bank to the Bahman Group as unlawful.

Mostafa Izadi, the Deputy for Strategic Affairs and Supervision at the General Staff of the Armed Forces noted in this newly revealed document that the Judiciary has remained silent on the smuggling, bribery, and forgery involving the Crouse Company due to its employment of several thousand individuals.

The trial for the Crouse Company, with two dual-citizen defendants, Hamid Keshavarz holding American citizenship and Mohammad Alipour Fetrati holding Canadian citizenship, commenced in 2023 at the Special Court for Economic Offenses, presided over by Judge Abolqasem Salavati.

During the trial, the Islamic Revolutionary Guard Corps‘ Intelligence Organization stated that the defendants in this case had paid over three billion tomans in bribes to Hossein Fereydoun, the brother of the regime’s former president Hassan Rouhani.

According to the indictment, the Crouse Manufacturing Company, whose trial was held on February 11, received over $1.38 billion in state currency between 2013 and 2019, making it the largest recipient of state currency among the country’s manufacturers. The indictment also stated that the company sold its parts to automakers at approximately $220 million higher than the actual market price from 2016 to 2019.

The Deputy for Strategic Affairs and Supervision at the General Staff of the Armed Forces wrote a letter to Khamenei, referring to the sanctions imposed on the automotive industry as “a part of the plan to create crisis and overthrow the Islamic Republic.”

He further explained, “The main reason for the increased prices of Iran Khodro and SAIPA vehicles in 2012 and 2018 was the practice of assembling domestically produced cars and selling imported parts at exorbitant prices under the guise of domestic production by companies like Crouse, coupled with the inability to manage sanctions effectively.”

In the same letter addressed to Ebrahim Raisi, Izadi highlighted the substantial financial losses incurred by the automakers, indicating “accumulated losses in the billions of tomans.” He warned that if this trend continues, it could lead to “unusual incidents and widespread unemployment.”

He stressed that such circumstances could “fuel public dissatisfaction” and create security challenges.

To mitigate the issue’s escalation, Izadi proposed the selection of investors and managers aligned with the regime’s objectives, underscoring the military’s significant influence over substantial contracts within the economic domain.

Iran Khodro’s quarterly financial report, released in late December, revealed an accumulated loss of 104.43 trillion tomans for the automaker. This marked a significant increase from the 73.907 trillion tomans in losses recorded at the end of the previous year, indicating a 41% rise in just nine months.

Similarly, SAIPA’s quarterly financial statement, also released in late December, showed an accumulated loss of 48.244 trillion tomans, representing a 26% increase from the beginning of the year, where the loss stood at 38.377 trillion tomans.