Setad (short for Persian: ستاد اجرایی فرمان امام, Setade Ejraiye Farmane Emam, lit. "The Executive Headquarters of Imam's Directive") also known as The Execution of Imam Khomeini's Order or EIKO,[1][2] is a parastatal[3] in the Islamic Republic of Iran, under direct control of Supreme Leader of Iran. Created from thousands of properties confiscated from Iranians, Setad holdings include large amounts of real estate and 37 companies, covering nearly every sector of Iranian industry, including finance, oil, and telecommunications.[4] While its accounts are secret even to the Iranian parliament, a 2013 estimate by Reuters news agency put Setad's combined value at $95 billion (made up of about $52 billion in real estate and $43 billion in corporate holdings).[4]

Originally an order by the Supreme Leader Ruhollah Khomeini to three of his aides to take care of and distribute abandoned property to charity,[5] it is now "one of the most powerful organizations in Iran", and its revenue provides Supreme Leader Ali Khamenei with the financial means to operate independently of the parliament and national budget.[4] Setad officials maintain that their assets were acquired legitimately, and part of the organization's profits go to charity,[4] but the organization has been criticized for bending Iranian law to confiscating property and extracting large payments from Iranians in disfavor with the government.[6]


The organization launched was on April 26, 1989 when the first Supreme Leader of Iran, "The Imam" Ruhollah Khomeini, issued a two-paragraph order directed three of his aides to manage, maintain or sell properties confiscated or "supposedly abandoned during the chaotic years following" the 1979 Islamic Revolution.[Note 1][4] The order called for the implementation of Article 49 of Constitution of Iran under which the government had the right to confiscate all wealth accumulated through illegal means, restore "it to its legitimate owners"; and if tho owners could not be identified, entrust it "to the public treasury".[8]

Aides of Khomeini, Habibollah Asgaroladi, Mehdi Karroubi and Hassan Sane'i were appointed by him in the order,[5][7] to take over all "sales, servicing and managing" of assets "of unknown ownership and without owners."[6] The aides were to help "as much as possible" seven bonyads and charities specified,[6] such as the Foundation of Martyrs and Veterans Affairs, State Welfare Organization of Iran.[9] The "families of the martyrs, veterans, the missing, prisoners of war and the downtrodden" were to be aided.[6] The aides were to partially pass their control to Ministry of Economic Affairs and Finance (Iran).

According to Reuters, one of its co-founders of Setad, Mehdi Karoubi,[6] wrote in 2009 that the organization was originally intended "to operate for no more than two years".[4] (Karoubi has been under house arrest in Iran since 2011.)[6] Khomeini died about a month after giving the order, which did not disband but developed into a parastatal organization, the Setad Ejraiye Farmane Hazrate Emam - "the Headquarters for Executing the Order of the Imam".[5] Its more than two decades of development and growth have been under the second Supreme Leader, Ali Khamanei.

One the group's earliest steps to move beyond property took place in 2000 when an investment management firm called Tadbir Investment Co. was set up.[5] By 2006, the organization "had amassed billions of dollars" in property seized from Iranian citizens, and sanctions against the Islamic Republic by the US and UN were intensifying.[5] The organization determined that large diversified conglomerates, such as the South Korean Chaebol, helped developing economies such as Iran's grow faster. To make a conglomerate out of Setad, the organization expanded its corporate holdings, assisted by helpful bureaucratic and judicial orders.[10] By 2008 one managing director in Setad declared the group had been transformed "from a collective that sells property into an economic conglomerate".[5]

Mohammad Mokhber, President and CEO of EIKO (Setad)

According to Reuters new agency the organization acquired a stake in "a major bank" (Parsian Bank) in 2007 and in "Iran's largest telecommunications company" in 2009. In 2010 it took control of Rey Investment Co, valued by the US Treasury Department at $40 billion that year.[5]

By 2013, Setad had morphed into a business juggernaut with real estate, corporate stakes and other assets worth an estimated $95 billion (in comparison, Iran's oil exports for 2012 were worth only $68 billion).[4][11] It was able to evade the US and UN sanctions with "complex network of front companies and subsidiaries" in foreign countries,[5] although in June 2013 the US Treasury Department imposed sanctions on Setad itself, which it called "a massive network of front companies hiding assets on behalf of … Iran's leadership."[4] (The 2015 Geneva interim agreement on Iranian nuclear program eased sanctions and may benefit sectors of Setad.[12])


Among Iranians who have served in running of or overseeing of Setad are Mohammad Javad Iravani, who took over as head of Setad in 1997. In 2007, Mohammad Mokhber began acting as CEO. In 2009, Mohammad Saeedikia, a former Iranian minister of housing and urban development, was named chairman of the Setad subsidiary Tadbir Construction Development Group.[13] Aref Norozi, served on the board of Tadbir Investment and was head of Setad's real-estate division.[5] Ali Ashraf Afkhami, was "identified" as of 2013 as head of Tadbir Economic Development Group.[4] Mohammad Shariatmadari served on Setad's board of directors sometime before that.[13]

Activities, issues, organization

Economic activities

In expanding its corporate holdings, Setad has acquired dozens of Iranian companies and stakes in other companies both private and public.[10] Information of its doings is limited as the organization is "secretive" and "little known".

As a Bonyad (Iranian charitable foundation),[3] Setad has been involved in charitable activities including the building of schools, roads and health clinics, the providing of electricity and water in rural and impoverished areas, and the assisted of entrepreneurs in development projects. Setad officials state that their assets have been acquired legitimately, and part of the profits from acquisition go to charity.[4] How much of Setad's activities are philanthropic is unknown as its books are "off limits" to the public and even to the Parliament of Iran (In 2008 Iran's parliament voted to "prohibit itself from monitoring organizations that the supreme leader controls, except with his permission".)[4]

In 2013, Reuters news agency published a three-part investigative series on Setad, " Assets of the Ayatollah", arguing that contrary to its claim of being a "custodian" of "property without owners," the conglomerate has been built on "the systematic seizure of thousands of properties belonging to ordinary Iranians", not only the officially condemned Bahais, but "Shi'ite Muslims, business people and Iranians living abroad".[4] Owners of confiscated property complain that Setad is a "methodical moneymaking scheme" involving court orders obtained "under false pretenses to seize properties". The owners of the property are then pressured "to buy the property back or pay huge fees to recover them".[4] (Reuters questions whether the practices of the Setad do not belie one of the fundamental claims for the Islamic Republic. Founder of Setad and the Islamic Republic—Ayatollah Ruhollah Khomeini—asserted in his work Islamic Government that contrary to the un-Islamic monarchy of the Shah he would later overthrow, his Islamic government would "not [be] a tyranny, where the head of state can deal arbitrarily with the property and lives of the people, making use of them as he wills." Ali Khamenei himself described the era of the monarchy as one where, "Our people were living under the pressure of corrupt, tyrannical and greedy governments for many years, [The shah's father] grabbed the ownership of any developed piece of land in all parts of the country ... They accumulated wealth. They accumulated property. They accumulated jewelry for themselves.")[6]

Acolytes of the man who controls the conglomerate, the Supreme Leader, emphasize his spartan lifestyle, his modest wardrobe and furnishings in his Tehran home.[4] The Reuters investigation of Setad "found no evidence that Khamenei is tapping Setad to enrich himself".[4] What critics do accuse the Supreme Leader of is using the great wealth of Setad for political power.[4] Serving the Supreme Leader, Setad helps to fund his Beite Rahbar, ("Leader's House"). Whereas the first supreme leader, Khomeini, had a small staff, under Khamenei it has grown to "about 500 people ... many recruited from the military and security services".[4]

As of 2008 Setad's real estate holding were reportedly worth about $52 billion. The organization regularly conducts large auctions of its real estate - at least 59 as of November 2013. In one auction in May 2013, "nearly 300 properties" where for sale, "the required opening bids totaled about $88 million".[4]

Setad's stakes in publicly traded companies totaled nearly $3.4 billion as of 2013.[5] It controls many businesses in which it holds very small stakes.[4] In one case, it "transformed" the formerly liberal, privately-owned Parsian Bank—Iran's largest non-state bank in 2006—with new managers, a new strict dress code, etc. despite having only a small stake (estimated to be 16%) in ownership.[5] An investment firm that Khamenei controls has been accused of forcibly taking over an Iranian company that is Iran’s biggest dealer of German automobiles.[14][15] To evade sanctions, Setad has maintained a complex network of front companies and subsidiaries abroad in places like Germany, Croatia, South Africa, the UAE, Turkey and beyond.[5]

According to an unnamed former employee of Setad who spoke to Reuters, Khamenei appoints the board of directors but delegates management of Setad to others, having himself just one primary interest—Setad's "annual profits, which he uses to fund his bureaucracy".[5]

Iranian authorities have stated the findings of the Reuters investigation lack "any basis", are "far from realities" and "not correct," but have given no further details.[5]

Political advantage

As an organ of the Supreme Leader, Setad is not overseen by the "Islamic Consultative Assembly" (Iranian Parliament). It is, however, an important factor in Khameni's power, giving him financial independence from parliament and the national budget, and thus "insulating him from Iran's messy factional infighting".[4] According to Reuters news agency, the "revenue stream" provided by Setad, "helps explain" why Khamenei has not only held on to power for 24 years but also "in some ways has more control than even his revered predecessor" Khomeini.[5]

Khamenei family

According to sources critical of the Supreme Leader, members of Khamenei's family have deposited large sums in foreign bank accounts. In 2009, British banks froze $1.6 billion in funds belonging to Ali Khamenei's son (Mojtaba Khamenei) according to[16] According to leaked reports in 2011, Ali Khamenei had $36 billion in bank accounts abroad, and his son Mojtaba $21 billion.[17] Various other Khamenei family members are also alleged to have hundreds of millions of dollars deposited in a wide array of foreign banks and financial institutions.[14] According to to a 2015 report, Khamenei claims to have a personal net worth of only $150 million.[18]

Organization structure and holdings

The following companies are among some entities affiliate to EIKO (aka Setad):[19][20]

An organigram for EIKO (Setad) as of 2002-3 produced The U.S. Department of the Treasury[40] is as follow:

Legal protections and issues

Protection from oversight

Khamenei, judges, and parliament have issued a series of bureaucratic edicts, constitutional interpretations and judicial decisions over the years bolstering Setad.[6][10] In addition to a 2008 vote by the Iranian parliament to prohibit itself from monitoring organizations controlled by the supreme leader without his permission.[4] Should parliament change their mind, the powerful Guardian Council (whose clerics and jurists "directly or indirectly appointed" by Khamenei), has issued a declaration that Setad was beyond parliament's authority, [Note 2] Prior to these decisions, Reuters reports that in 1997 after reformist Mohammad Khatami was elected president, a government "legal commission" declared that the Iranian anti-corruption body known as the General Inspection Office "had no right to inspect Setad unless the supreme leader requested it to do so" in order to "shield Setad from scrutiny".[6]

Unlike other foundations in Iran, Setad does not include it logo or full name in newspaper advertisements listing auctions of confiscated property.[4] Its large gray concrete headquarters in Tehran is unidentified.[6]

Reuters notes that while critics complain that these protections are "why no one knows what is going on inside" organizations like Setad", Khamenei maintains that "No one is above supervision," in the Islamic government, not "even the leader ... let alone the organizations linked to the leader," and "I welcome supervision, and I am strongly opposed to evading it. Personally, the more supervision I receive, the happier I will be."[6]

Management and disposal of confiscated assets

There is ambiguity and contradiction in Iranian laws for confiscation assets and asset forfeiture, particularly who has jurisdiction over it. Under Article 49 of the constitution, the government is obliged to confiscate illegal wealth and return to its owner, "and if no such owner can be identified, it must be entrusted to the public treasury".[41] The Ministry is overseen by the parliament and president, rather than the Supreme Leader (although the Supreme Leader is ultimately the ruler of Iran).[Note 3]

However, in 1984 an implementation of Article 49 of the Iranian constitution ratified by Parliament of Iran (when Akbar Hashemi Rafsanjani was speaker of the parliament) transferred the right to control huge part of public assets, replacing the Treasury with another entity (Setad) outside the government and in direct control of Supreme Leader of Iran.[41]

In apparent conflict with this decision, another law was ratified by the parliament in 1992 (when another politician, Mehdi Karroubi was speaker of the parliament), calling for the transfer of confiscated assets to the government and establishing an Organization for Collection and Sale of State-owned Properties of Iran under the Ministry of Economic Affairs and Finance to deal with those assets.[43] Despite clearly transferring control of confiscated assets to the government, this law was never implemented mainly due to circulars issued by chief justice Mahmoud Hashemi Shahroudi in 2009,[44] and by his successor, chief justice Sadeq Larijani in 2013.[45][Note 4] (The Chief Justice in Iran is appointed by Supreme Leader of Iran based on Article 110 of Iranian constitution.[41])

Destination of proceeds

The key actors involved in the confiscation in Iran are:

In contradiction to common practice [46] Setad not only manages the disposal of confiscated assets, but is the destination of the proceeds.

Setad and the Revolutionary Guards

Setad and Army of the Guardians of the Islamic Revolution (IRGC) are both under control of Supreme Leader of Iran and have cooperated in different fields in recent decades.[47]

In 2011, a consortium known as Mobin Trust Consortium (TEM) purchased of 51% of shares of Telecommunication Company of Iran (TCI).[48] The acquisition was among the biggest in Iran's history.[49] The largest stakeholder of the consortium "was a company controlled by the Revolutionary Guards", and Setad controlled another 38%.[5] The terms of payment were very favorable—TEM was required to make a down payment of only 20% and had eight years to pay the rest of the price.[5] Board of managers of TCI has members from both Setad and IRGC. For example Dr. Ali Baghaei [50] is CEO and Vice Chairman of Tadbir Economic Development group (a subsidiary of Setad)[51] and at the same time he is president of MCI which is subsidiary of TCI.[52] Also Mr. Seyed Asadollah Dehnad who is member of IRGC [53] is member of board of MCI.[52]

The takeover of the TCI by the Setad and Revolutionary Guard was assisted by a government regulator, the Iranian Privatisation Organisation (IPO), which eliminated a competing bid for the TCI (by a telecom company called Pishgaman Kavir Yazd Cooperative Co.) the day before the sale of TCI. In 2010, the man responsible for the elimination of the bid—the head of IPO at the time of the sale, Gholamreza Heydari Kord Zanganeh—was appointed managing director of Tose'e Eqtesad Ayandehsazan Co, or TEACO—a "giant holding company" owned by Setad. He was later named chairman of a large pharmaceutical holding company also owned by Setad (Sobhan Pharma Group). Both examples of the "revolving door between Setad and Iran's government", according to Reuters.[13]


In July 2010, the European Union added the president of Setad, Mohammad Mokhber, to its list of individuals and entities being sanctioning for alleged involvement in "nuclear or ballistic missiles activities." Two years later, it removed him from the list without explanation, but allegedly in "an attempt to fend off a broader Iranian legal challenge to financial sanctions on Iran's banks and bank directors".[5]

United States Department of the Treasury took action on 4 June 2013 to "expose" EIKO (Setad) -- what it called a " Massive Network of Front Companies" -- and declare it subject to sanctions [54] pursuant to Executive Order 13599,[55] which "blocks the property of the Government of Iran", (prohibiting "U.S. persons from engaging in most transactions" with people "meeting the definition of Government of Iran").[55]

A January 16, 2016 US government document[56] stated EIKO was not on the SDN List (Specially Designated National)[57] nor "subject to Secondary Sanctions",[58] but that "US persons" were required to continue to "Block the Property and Interests in Property" of EIKO (Setad) in accordance with Executive Order 13599.[56]

(The 2015 Geneva interim agreement on Iranian nuclear program which eases sanctions may benefit petrochemical companies belonging to Setad according to Reuters.[12])

See also



  1. Reuters states that "The order directed two aides to sell and manage properties",[5] but the text in Persian at[7] indicates there were three people addressed by the order, namely: Habibollah Asgaroladi, Mehdi Karroubi and Hassan Sane'i
  2. according to an attorney who worked on "several property confiscation cases involving Setad", this occurred during the second term of President Mohammad Khatami, 2001-2005.[6]
  3. According to articles 133 to 137 of the constitution, Ministers (such as the head of the Ministry of Economic Affairs and Finance) are appointed, supervised and dismissed by the President, approved by or voted out by the Parliament, and responsible to both.[42]
  4. "Larijani told lower courts that Setad's old rival, the Department for the Collection and Sale of Acquired Property, had no authority to take property in the supreme leader's name."[6]


  1. Treasury Targets Assets of Iranian Leadership| US Department of the Treasury. Press Center | 6/4/2013
  2. U.S. blacklists global network of Iranian 'front' companies| Reuters | 4 June 2013 |retrieved 22 November 2016
  3. 1 2 Outtier, Natela. "Want to Invest in Iran? Here's What You Need to Know Before You Go". Frontera. Retrieved 24 November 2016.
  4. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Stecklow, Steve; Dehghanpisheh, Babak; Torbati, Yeganeh (November 11, 2013). "Khamenei controls massive financial empire built on property seizures, (Assets of the Ayatollah, part 1)". Reuters. Retrieved 13 November 2013.
  5. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Steve Stecklow; Babak Dehghanpisheh. "Khamenei's conglomerate thrived as sanctions squeezed Iran. (Assets of the Ayatollah, Part 2)". November 11, 2013. Reuters. Retrieved 21 November 2016.
  6. 1 2 3 4 5 6 7 8 9 10 11 12 13 Torbati, Yeganeh; Stecklow, Steve; Dehghanpisheh, Babak (13 November 2013). "Special Report: To expand Khamenei's grip on the economy, Iran stretched its laws (Assets of the Ayatollah, part 3)". Reuters. Retrieved 22 November 2016.
  7. 1 2 تعیین نمایندگان برای رسیدگی به وجوه و اموال مجهول المالک و... | |6 اردیبهشت 1368 / 19 رمضان 1409 |accessed 21 November 2016
  8. Iranian Constitution, Section 4-Economy and Financial Affairs|| accessed 21 November 2016
  10. 1 2 3 Revealed: Iranian supreme leader’s $95 billion business empire| Reuters Exclusive || 11 November 2013| retrieved 22 November 2016
  11. Cordesman, Anthony H. (January 26, 2016). New Estimates of Iran’s Petroleum Exports and Income after the Nuclear Implementation Day and Reductions in Sanctions. Center for Strategic and International Studies. Retrieved 22 November 2016.
  12. 1 2 "Exclusive-Khamenei's Business Empire Gains From Iran Sanctions Relief". New York Times. Reuters. 22 January 2014. Retrieved 22 January 2014.
  13. 1 2 3 Dehghanpisheh, Babak (24 December 2013). "Exclusive: Iran official got job in Khamenei conglomerate after approving deal". Reuters. Retrieved 27 November 2016.
  14. 1 2 Iran’s Supreme Leader Ayatollah Khamenei… A Multi-Billionaire And BMW Car Dealer?| PALASH GHOSH |International Business Times |05/03/13 |retrieved 22 November 2016
  15. Iran's Ayatollah Khamenei embroiled in German car dealer row |by Damien McElroy, Ahmad Vahdat |Daily Telegraph |2 May 2013 | retrieved 22 November 2016
  16. Britain has reportedly Frozen $1.6B assets of Mojtaba Khamenei, son of Iran's supreme leader|| 23 June 2009| retrieved 22 November 2016
  17. Report: Khamenei and son stashed billions in foreign accounts| MAY 16, 2011| acme of skill |From|retrieved 22 November 2016
  18. Ranking World Leaders By Net Worth| Rant Finance |2015/10/04
  41. 1 2 3
  42. Iranian Constitution, Section 9.2- The President and Ministers|| accessed 22 November 2016
  44. احکام و قرارهای صادره به نام ستاد اجرایی فرمان حضرت امام (ره) معتبر است
  45. قانون نحوه اجرای اصل 49 قانون اساسی جمهوری اسلامی ایران Islamic Parliament Research Center (Persian)
  47. barakat foundation
  48. teminvestco
  50. Karafarin Bank (Persian)
  51. AnvariOnline.Net (Persian)
  52. 1 2 (Persian)
  53. (Persian)
  54. Treasury Targets Assets of Iranian Leadership| US Department of the Treasury
  55. 1 2 List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599]| 1/16/2016| US Department of Treasury Resource Center
  56. 1 2 OFFICE OF FOREIGN ASSETS CONTROL] List of Persons Identified as Blocked Solely Pursuant to Executive Order 13599 |US Department of the Treasury |January 16, 2016

External links

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