Iran’s judiciary has forcefully defended a disgraced oil tycoon from accusations by the central bank that he had not paid back his debts after he was convicted in one of the country's biggest ever corruption cases.
The clash over Babak Zanjani, whom Iranian media outlets say Tehran has recruited back into business as new sanctions loom, appears to indicate policy divisions among key institutions as the country reels from a damaging war in June.
Judiciary spokesman Asghar Jahangir on Wednesday rejected a statement last month by the central bank's governor saying Zanjani had only repaid about $15 million of a total $1.9 billion in oil revenue he was convicted of embezzling.
“At a time when the country needs calm, the judiciary cautioned central bank governor Mohammadreza Farzin to avoid comments that could disturb public opinion,” Jahangir added. The matter “rests solely with the courts," he said.
Zanjani's original 2016 conviction on fraud and money laundering charges earned him a death sentence, which was commuted to a 20-year prison term last year by Iran's Supreme Leader Ali Khamenei. He was released in April.
A wily evader of Western sanctions on Iran, Zanjani was widely reviled by many Iranians struggling in straitened economic circumstances but prized by officialdom for his craft in securing oil exports, the main source of state revenue.
“The defendant served his sentence without a single day’s leave until the introduction of his assets, which were even greater in value than the debt,” Jahangir said. “Claims that these assets were not returned have no valid legal basis.”
From air fresheners to oil billions
Babak Zanjani, born in 1951, was the prime defendant in one of Iran’s biggest corruption cases. He once said that during his military service he was the driver of the central bank governor and used the connection to trade hard currency—an account the bank has denied.
What is clear is that he developed ties with the Revolutionary Guards’ Khatam al-Anbia engineering arm through Ahmad Vahid Dastjerdi, then head of the IRGC cooperative foundation.
Before that, Zanjani had worked in small businesses, from producing air fresheners on Kish Island to selling sheep hides abroad. His fortunes changed in 2007 when he began supplying parts for IRGC projects.
In 2010, Zanjani became a crucial oil broker under Oil Minister Rostam Ghasemi. He acquired Malaysia’s First Islamic Investment Bank to channel oil revenues and built a network of exchanges in the United Arab Emirates and Tajikistan.
A 2012 decree signed by three ministers and the central bank governor allowed 14.5 percent of oil revenues to flow into his bank—a key focus of his eventual indictment.
In the last year and a half of Mahmoud Ahmadinejad’s presidency, Zanjani not only took delivery of crude shipments offshore but also received that 14.5 percent of oil sales directly, leaving him with a large debt to the oil ministry.
At the same time, his Sorinet holding bought domestic carrier Qeshm Air, extending his empire into aviation.
Fall and rise
Only months before his downfall, Zanjani called himself an “economic Basij member,” a reference to a domestic enforcement militia loyal to the Islamic authorities.
In 2013, after disputes with then-President Hassan Rouhani's government, he was arrested. In March 2016 judiciary spokesman Gholamhossein Mohseni Eje’i announced that Zanjani and two associates had been convicted as so-called corruptors on earth and sentenced to death.
The Supreme Court upheld the ruling but allowed clemency if he returned the funds.
“As the assets were returned and the debt was settled, the Supreme Leader granted clemency, reducing his sentence to 20 years,” his lawyer said in April 2024. He was released in December 2024.
Reports this year suggested Zanjani had resumed business activities, including launching an airline called Dot-One with 32 aircraft, as well as ventures in ride-hailing, shipping and rail imports.
In May, an $800 million contract between the transport ministry and a company linked to him marked his apparent full rehabilitation, sparking controversy.
