AREZOO KARIMI

IranWire

Babak Zanjani, Iran’s notorious embezzler who was sentenced to death in 2013 for pocketing 2.8 billion euros ($3.1 billion) of oil money, has now secured a $800 million contract with the Islamic Republic Railways.

This remarkable comeback by a man once branded the "supreme economic corrupt figure" has taken place despite his conviction for financial crimes so severe they would have led others to the gallows.

On April 20, just months after his conditional release from prison, Zanjani’s company signed what is being described as "the largest private sector investment in the history of Iranian railways," with the full backing of President Masoud Pezeshkian’s administration.

The story of Babak Zanjani reads like a political thriller.

Arrested in December 2013, he was accused of embezzling billions from Iran’s oil revenues at the height of international sanctions.

His offenses were deemed so egregious that Iran’s judiciary sentenced him to death, portraying him as the embodiment of the corruption that plagued the national economy.

The charges included “corruption on earth through disruption of the economic system,” along with accusations of leading an organized criminal network, document forgery, money laundering, and widespread fraud targeting Iran’s banking system and Ministry of Oil.

His crimes were severe, leaving little room for mercy.

Yet in Iran’s uneven justice system, Zanjani’s case took a surprising turn: the Supreme Leader intervened, commuting his death sentence to 20 years in prison.

By April 2024, barely a decade after his conviction, reports emerged about his conditional release. By January this year, photos of the newly freed billionaire were circulating in Iranian media.

His trajectory stands in sharp contrast to that of other economic offenders, many of whom were executed for embezzling far smaller sums and were not granted similar reprieves.

The disparity has not gone unnoticed by observers both inside and outside Iran.

While questions about Zanjani's early release remained unanswered, something even more remarkable was taking shape.

On November 17, 2024, a new holding company named Avan was registered with a modest capital of 30 billion tomans (£375,000).

In just five months, this fledgling firm spawned ten subsidiaries across transportation, technology, and trade sectors.

The most prominent of these was Avan Rail, which rapidly emerged as a major player in Iran’s transportation infrastructure.

On April 20, Avan Rail signed what was promoted as "the largest private sector investment in the history of Iranian railways" with the Islamic Republic Railways.

Farzaneh Sadegh, Minister of Roads and Urban Development in President Masoud Pezeshkian’s cabinet, was in the contract's signing ceremony.

The ambitious deal involves 61 trillion tomans ($800 million) allocated for 300 diesel self-propelled passenger locomotives, 50 freight locomotives, and 600 tank freight wagons.

For a company just five months old with limited declared capital, the contract immediately raised suspicions.

When questioned about the source of Avan Rail's funding, the company's transportation manager, Mehdi Ebrahimi, offered a puzzling explanation.

He claimed the money came from foreign capital via an international framework, with the main shareholder being a confidential foreign investor whose identity could not be revealed.

When pressed on Babak Zanjani’s involvement, Ebrahimi hesitated and gave contradictory responses.

He insisted Zanjani was neither a shareholder nor directly involved in the company, yet paradoxically admitted, “the money belongs to him” and that Zanjani had “supported projects as a backer.”

Ebrahimi further claimed Adel Heydari had taken over as Avan Rail’s CEO in March, succeeding Asadollah Karimi, and categorically denied ever seeing Zanjani at the holding company.

However, an investigation by IranWire uncovered registration documents contradicting these claims.

Official records showed that Zanjani was appointed CEO of Avan International Financial and Economic Development Group on March 15, 2025 - a role he will hold through March 15, 2027. Meanwhile, Adel Heydari was listed as chairman of the board, not CEO as claimed.

The inconsistencies extended to the digital realm. While company representatives denied Zanjani’s direct involvement, an account attributed to him on X proudly announced the railway deal, proclaiming, “The largest private sector investment in the history of Iranian railways - we will put the country's economy on track. The year when economic power will replace political power.”

Following the Money

Perhaps the most troubling question is where the 61 trillion tomans ($800 million) for this massive investment originated.

Given Zanjani’s history, speculation has centered on whether this could be the same embezzled oil money he never returned to Iran - now funneled through his new corporate network.

This would be in keeping with his established modus operandi. In the early 2010s, Zanjani amassed his fortune by operating in the gray areas created by international sanctions.

Working in tandem with the Islamic Republic and its Central Bank, he facilitated oil sales via a complex web of intermediaries and currency manipulation.

As sanctions tightened, Zanjani pocketed €2.8 billion from oil sales - funds that were never returned to the Iranian treasury.

Now, a broader investigation has revealed that Zanjani remains a shareholder and board member in at least 11 active companies within Iran, indicating his business empire stretches well beyond this railway deal.

His brazen reemergence has prompted criticism from unexpected quarters. Even journalists and political activists aligned with Iran’s hardliners have voiced alarm.

Prominent political activist Mohammad Mohajeri remarked sarcastically, “May the days of investment by supreme economic corrupt figures and their cooperation with the esteemed Ministry of Roads and Urban Development continue.”

He went on to describe the railway contract as a “banana peel under the feet of Masoud Pezeshkian’s government” - a political liability that could erode public trust in the administration.

Though the railway contract has dominated headlines, reports suggest Zanjani’s business interests span much wider. Even during his imprisonment, and increasingly since his release, his name has been linked to ventures in banking, oil, shipping, aviation, and hotel construction.

His activity on X during this time shows him openly discussing the operations of his Dot One group in the transportation sector - apparently unfazed by the scrutiny his criminal record continues to attract.