Iran's spiritual leader's $95b empire

Ayatollah Ali Khamenei owns a sprawling network of companies through the state-run Setad group.

Ayatollah Ali Khamenei, Iran's Supreme Leader, has built a state-run business empire so vast that it includes a factory producing contraceptive pills - despite his urging fellow countrymen to forsake birth control and produce a baby boom.

His growing dominance over the national economy is laid bare in a report that reveals Iran's top cleric and most powerful political figure to be in command of enterprises worth an estimated US$95 billion ($115 billion).

The figure was uncovered in a six-month investigation by Reuters, which reported that a sprawling network of companies and properties was at his disposal thanks to his control of a state organisation, known as Setad, or the Headquarters for Executing the Order of the Imam.

The organisation was originally established for charitable purposes, to provide revenues to assist the poor, but has been built up steadily over the years - boosted by a flurry of acquisitions which have included property confiscated from religious minorities, political opponents and Iranian expatriates.

There was no evidence that Khamenei, noted for an austere lifestyle, personally enriched himself from assets worth 40 per cent more than Iran's latest annual oil income, Reuters reported. But the control is a political lever that has enabled him to rise above rival political factions.

Now Khamenei has expanded Setad into a "financial juggernaut" that he has used to cement his 24-year grip on power, according to Reuters.

Under its orbit are 37 companies reaching into every corner of the Iranian economy - including finance, oil, telecommunications and even ostrich farming.

But the conservative ayatollah's transformation into an economic powerhouse also threatens to undermine his stated goal of presiding over a rapid rise in Iran's population, the investigation found.

In a glaring contradiction, ATI Pharmed, a pharmaceutical company run by Setad's charitable foundation, Barakat, embarked on a joint venture in May this year with a Swiss company, the Geneva-based Stragen Pharma, that included plans to produce oral contraceptives.

The initiative - in which the Iranian company has a 66 per cent share - jars with an edict issued by Ayatollah Khamenei to Iran's Health Ministry to scrap the country's liberal birth-control policy in an effort to raise the population - now about 75 million - to 200 million.

"The business empire controlled by Iran's Supreme Leader had grown so large that it now owned companies whose products Khamenei opposes," Reuters reported.

The economic encroachment has also had a baleful effect on workplaces. Employees at Parsian Bank, a private bank with more than 100 branches known for its liberal dress codes, experienced a culture shock when Setad's investment arm acquired a stake in the business in 2006. Male staff were banned from wearing ties while female employees received warning letters asking: "Why are you wearing jeans? Why are your lips red?"

The growth of Setad's business interests has attracted the attention of the United States Treasury, which imposed sanctions on the organisation and the companies under its wing last June as part of the international drive to pressure Iran to abandon its suspect nuclear programme.

The Treasury branded Setad - originally formed by the late Ayatollah Ruhollah Khomeini, the current supreme leader's predecessor - as "a massive network of front companies hiding assets on behalf of Iran's leadership".