STiR coffee and tea magazine

16 STiR coffee and tea | 2024 Issue 1 (February / March) Debsh Tea Implicated in $3.4 Billion Scandal Akbar Rahimi, the c.e.o. of Iran's leading tea company, is accused of participating in a five-year $3.37 billion embezzlement scheme. Privately held Debsh Agriculture and Industrial Group engaged in "large-scale financial malpractice," according to NCRI, citing unnamed government sources. The publication is owned and operated by the Iranian resistance. The amount set a financial record for corruption in Iran in a scheme spanning the years 2019 to 2022. Officials denied any involvement. Legislators complained the executive branch had suppressed oversight. Lawmaker Mohammad Vahidi said the lost funds would have built 100,000 classrooms and remodeled every rundown school in the country. "Several banks, institutions, and ministries, such as the Ministry of Industry, the Ministry of Agriculture, the Customs Administration, the Central Bank, the Trade Development Organization, and the regime's Food and Drug Organization, have been implicated in this widespread corruption scheme," writes NCRI. Here is how it unfolded: Debsh imported grade 1 Darjeeling tea, paying $14 per kilogram to mislead resellers. In practice, it shipped tea from Kenya and poor-quality seconds from Iran that sold for $2 per kilogram "with the Food and Drug Organiza- tion (falsely) confirming the quality of the imported teas," according to NCRI. The company also bought domestically grown tea and "re-imported" it as expensive foreign grades. The tea was traded at the Central Bank's official exchange rate, known as the "Nimaee-dollar," which values US dollars at 37,000 tomans, "a rate accessible exclusively to traders affiliated with the regime. This compares to the market exchange rate, which hovers around 50,000 tomans per dollar. Consequently, each dollar contributes approximately 13,000 tomans to the coffers of the regime's embezzlers. When multiplied by the billions of dollars received in foreign exchange, this translates to astronomical figures," writes NCRI. One toman is equivalent to 10 rials or $26 US dollars). Tea producers in Iran process 30,000 metric tons annually, about one-third of total consumption; the remainder is imported. Debsh handles most of the country's tea imports. Iran's General Inspection Organization in November 2023 revealed irregularities in the subsidized foreign currency allocated to import tea and tea-making equipment. Iran spends around $300 million to purchase tea from India, Sri Lanka, and Kenya. The government's allocation for tea and tea processing equipment also tripled in 2021, with $1.472 billion earmarked for machinery. Instead, the foreign currency (tea is traded in dollars) was allegedly traded on the black market. Imports increased to 110,000 metric tons, about double the usual amount – quantities sufficient to depress sales of domestically produced tea. "Tea cultivators have suffered huge losses," writes Maryam Shokrani with the state-run Sargh newspaper. Moham- mad Sadegh Hassani, executive director of the Union of Northern Tea Factories, told ICN the embezzlement scheme "upset the market balance, confronted the industry with a crisis, and led to the accumulation of a large volume of tea in warehouses." Akbar Rahimi, who is reportedly under arrest, is one of a group known colloquially in Iran as the "smuggling brothers," who were implicated in another significant case related to irregularities in the import of paper at the Ministry of Culture and Islamic Guidance. The term "smuggling brothers" refers to organized groups exploiting state connections, particularly with the Revolutionary Guards, to conduct extensive trafficking to bypass international sanctions," according to ICN. Charges against Rahimi were not made public. Judiciary spokesman Masoud Stayeshi, on Dec. 5, said, "Various collaborations have been made with this company [Debsh], and a significant amount of foreign exchange and national resources have been allocated to this issue." Other Islamic Republic officials implicated in the embezzlement include Javad Sadatinejad, the Minister of Agriculture, whom President Raisi removed in mid-April; governors of the Central Bank; chiefs of the Iranian Customs Administration, and others. Iran International reported that Chief Justice Gholam-Hossein Mohseni-Eje refused to name the suspected collabora- tors, several of whom are likely highly placed in the government of President Ebrahim Raisi. President Ebrahim Raisi has called for this case not to become "political," a code in Iranian politics for burying an issue. According to Iran International, Raisi called for the coverup after reports revealed his administration's part in the case. The case against government bodies that had provided foreign currency for the firm is to be sent to the Public and Revolution Court of Tehran, according to IFP News. Tea Report

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