Revealed: Iran supreme leader's $95bn empire

Ayatollah Ali Khamenei controls huge business empire, according to Reuters investigation

An Iranian protester holds a photo of supreme leader Ayatollah Ali Khamenei during a demonstration to mark the 34th anniversary of the 1979 US embassy takeover November 4. (Getty Images - for illustrative purposes only)

An Iranian protester holds a photo of supreme leader Ayatollah Ali Khamenei during a demonstration to mark the 34th anniversary of the 1979 US embassy takeover November 4. (Getty Images - for illustrative purposes only)

Iran's supreme leader Ayatollah Ali Khamenei controls a business empire worth around $95 billion - a sum exceeding the value of his oil-rich nation's current annual petroleum exports - a six-month Reuters investigation shows.

The little-known organization, called Setad, is one of the keys to the Iranian leader's enduring power and now holds stakes in nearly every sector of Iranian industry, including finance, oil, telecommunications, the production of birth-control pills and even ostrich farming.

Setad has built its empire on the systematic seizure of thousands of properties belonging to ordinary Iranians - members of religious minorities, Shi'ite Muslims, business people and Iranians living abroad.

The Reuters investigation, which is detailed in a three-part series, documents how Setad has amassed a giant portfolio of real estate by claiming in Iranian courts, sometimes falsely, that the properties are abandoned. The organization now holds a court-ordered monopoly on taking property in the name of the supreme leader, and regularly sells the seized properties at auction or seeks to extract payments from the original owners.

Reuters reporters identified nearly 300 properties that Setad put up for auction in May alone, many worth millions of dollars.

The organization's full name in Persian is "Setad Ejraiye Farmane Hazrate Emam" - Headquarters for Executing the Order of the Imam. The name refers to an edict signed by the Islamic Republic's first leader, Ayatollah Ruhollah Khomeini, shortly before his death in 1989. His order spawned an entity intended to manage and sell properties abandoned in the chaotic years after the 1979 Islamic Revolution.

According to one of its co-founders, Setad was created to help the poor and war veterans and was meant to exist for just two years.

Almost a quarter-century on, Setad has morphed into a business juggernaut with real estate, corporate stakes and other assets. While Setad controls a charitable foundation, it's not clear how much money goes to charity.

Under Khamenei, the organization has expanded its corporate holdings, buying stakes in dozens of Iranian companies, both private and public, with the stated goal of creating an Iranian conglomerate to boost the country's economic growth.

The supreme leader, judges and parliament over the years have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions bolstering Setad. "No supervisory organization can question its property," said Naghi Mahmoudi, an Iranian lawyer who left Iran in 2010 and now lives inGermany.

In June, the U.S. Treasury Department imposed sanctions on Setad and some of its corporate holdings, calling the organization "a massive network of front companies hiding assets on behalf of ... Iran's leadership."

The Iranian president's office and the foreign ministry did not respond to requests for comment for the series. Iran's embassy in the United Arab Emirates called Reuters' findings "scattered and disparate" and said that "none has any basis" but did not elaborate.

Setad's director general of public relations, Hamid Vaezi, said by email in response to a detailed description of this series that the information presented is "far from realities and is not correct." He did not go into specifics.

In a subsequent message, he said Setad disputes the Treasury's allegations and is "in the process of retaining U.S. counsel to address this matter." He added: "This communication puts you on notice that any action by your organization could prejudice our dispute in the United States and harm our position for which we hold you responsible."

Setad's total worth is difficult to pinpoint because of the secrecy of its accounts. Reuters estimates it at around $95 billion, made up of about $52 billion in real estate and $43 billion in corporate holdings. The estimate is based on an analysis of statements by Setad officials, data from the Tehran Stock Exchange and company websites, and information from the U.S. Treasury Department. The amount is roughly 40 percent bigger than Iran's total oil exports last year, which totaled $67.4 billion, according to theInternational Monetary Fund.

There is no evidence that Khamenei is tapping Setad to enrich himself. But Setad has empowered him. Through Setad, Khamenei has at his disposal financial resources whose value rivals the holdings of the shah, the Western-backed monarch who was overthrown in 1979.

As Iran's top cleric, Khamenei has final say on all governmental matters. His purview includes his nation's controversial nuclear program, which was the subject of intense negotiations between Iranian and international diplomats in Geneva that ended Sunday without an agreement. It is Khamenei who will set Iran's course in the nuclear talks and other recent efforts by the new president, Hassan Rouhani, to improve relations with Washington.

The investigation into Setad shows that as well as political power and military force there is a third dimension to Khamenei's power: economic might. The revenue stream generated by Setad helps explain why he has not only held on for 24 years but also in some ways has more control than even his revered predecessor. Setad gives him the financial means to operate independently of parliament and the national budget, insulating him from Iran's messy factional infighting.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

Posted by: Billy

Yesh.....your comments are shocking in the extreme. The way you shrug off the murder of "a few" men because of their sexuality is inexcusable. How can you just write off this brute of a leader as simply being fallible...."we all have flaws" you say. Unbelievable. I wonder if you would be so casual about these murders if one of these poor guys was your son. From the coldness of your comments maybe so. I also note that you are making these comments from the comfort and safety of the USA where you are allowed to be a "voracious reader of articles covering politics...." If you were back in Iran, where perhaps I might suggest you belong, you might find such a privilege hard to come by and somewhat dangerous. In fact if you were caught you might find yourself on the gallows. Would you be happy if your own death for simply reading books was shrugged off as a fallible error by a leader who is only human?

Posted by: Bahraini

I think that it is extremely na�ve to think that the man did not have an inkling of what is going on.

If not the little issues, the deviation from the original purpose should have been apparent especially at his level.

Hopefully get to read the full report.

Posted by: Yesh Prabhu

Dear Mr. Billy,
You have misinterpreted my comment. I did not shrug off the hanging of the homosexual men in Iran as a minor event. What I said is that, for a religious leader, Imam Khamenei is not as compassionate as he should be. That is, he should not have permitted the hangings. A spiritual person should be very compassionate and forgiving. I am totally against death penalty, even for the worst of the criminals because I am a follower of Mahatma Gandhi, and believe in forgiveness. I do not condone the killing of even animals for food; I am a vegetarian pacifist.
Yesh Prabhu, Bushkill, Pennsylvania

Posted by: max

That's really very shocking, interesting and significant - is this information new?

Posted by: Yesh Prabhu

This article is trying to shed light on the dark side of Imam Khamenei, I believe. It's possible that this organization, Setad, is merely using the Imam's authority and name to run the organization to its advantage, and that Imam Khamenei personally is not involved at all in its day to day operation. The dozens of articles I have read about the Imam - I am a voracious reader of articles covering politics, science, art, classical music, gardening, philosophy, religion, organic gardening, and culture - do not lead me to believe that he is a materialistic man seeking enormous wealth and living a luxurious life. For a religious man, perhaps he is not as compassionate as he should be - after all he allowed a few homosexual men in Iran to be hanged; but then who among us is perfect? We are all human and fallible, and we all have flaws.

Posted by: Bahraini

This is exactly why I am an advocate of separation of state & church. I believe that all religious organizations should be funded purely by the public with their own money if they believe that the same provides them tangible benefit. Now in regards to Iran and the Shiit religion in particular the followers of the same must pay a 20% tax on their savings (and sometimes property) on a yearly basis (once 20% is paid on a sum it need not be paid again on the same asset or sum). Now as one can understand this gives the religious leaders a great deal of economic power. In Iran the role of their leader is unquestionable (anyone hear of the old saying in the West, ?right hand of god?). In my opinion people need to wake up and make independent choices. I congratulate Reuters in opening our eyes to a very opaque world if for nothing else.

All comments are subject to approval before appearing

Further reading

Features & Analysis
Trading bricks: The growing popularity of real estate investment trusts in the Gulf

Trading bricks: The growing popularity of real estate investment trusts in the Gulf

Investor interest in real estate investment trusts (REITs) has...

First bank merger in 20 years sets Saudi Arabia up for more deals

First bank merger in 20 years sets Saudi Arabia up for more deals

Q&A look at what the planned merger of HSBC and RBS’s Saudi ventures...

A natural move: How Dubai Chamber is strengthening its ties in Latin America

A natural move: How Dubai Chamber is strengthening its ties in Latin America

With vast resources and more than half-a-billion people, the...

Most Discussed