Iran court annuls major privatization deal: report

Sat Dec 12, 2009 2:21am EST
 
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TEHRAN (Reuters) - An Iranian court has annulled one of the biggest privatizations in the Islamic Republic, last year's $1.5 billion sale of a 30.5 percent stake in Khuzestan Steel, an Iranian newspaper reported on Saturday.

Tehran Times, an English-language daily, said a private sector businessman, Mohammad Jaberian, agreed to purchase the stake in mid-2008, but later sought to revoke the deal due to a sharp decline in steel prices.

The report wprivatizationrorganization news agency, which said the decision to annul the deal was taken by judiciary authorities despite an earlier arbitration board ruling in favor of Iran's privatization organization.

Under the court decision, the company was returned to the government. Iranian stock exchange officials were not immediately available for comment.

Iran, the world's fifth-largest crude exporter, is seeking to speed up the sale of state assets in a bid to encourage private investment and boost the economy, which is under U.S. and U.N. sanctions over Tehran's disputed nuclear program.

Western firms are increasingly wary of investing in Iran due to the long-running nuclear row, and analysts say some of the companies that are put up for sale may simply end up being transferred within the country's vast public sector.

Earlier this year, a consortium linked to the elite Revolutionary Guards took a controlling stake of 50 percent plus one share in the Telecommunications Company of Iran in a deal valued at around $7.8 billion.

The United States and its allies suspect Iran is seeking to develop nuclear bombs. Tehran denies the charge and says its nuclear work is aimed at generating electricity so that it can export more of its oil and gas.

(Reporting by Hashem Kalantari and Fredrik Dahl; Editing by Bill Tarrant)