Ahmadinejad Urges 'Honest' Probe into Massive Scam

Iranian President Mahmoud Ahmadinejad on Wednesday asked the judiciary to launch an "honest" probe into a massive $2.6 billion scam, while brushing aside claims that members of his inner circle are involved.

Enemies of the government "launch accusations against us through a massive amount of propaganda, so the real thieves can get away," Ahmadinejad said in a speech in the northwestern city of Ardabil, broadcast on the presidency website.

"I am asking the chief of judiciary (Ayatollah Sadeq Larijani) to pursue the case and use honest people ... and find out what and who is behind the embezzlement," Ahmadinejad said.

The remarks come after revelations that several Iranian banks were targeted in one of the biggest frauds in the Islamic republic's history, collectively losing nearly $2.6 bn in more than two years.

The fraud was reportedly orchestrated by a single man, referred to as "Mr X" in Iranian media, who developed a network and used forged documents to obtain credit at one of Iran's biggest financial institutions.

The mastermind managed to purchase various assets across the country, including one of Iran's largest steel production companies, the state-owned Khuzestan Steel Company.

"Whoever they are, whether in the government, judiciary or parliament, or those with sacred attire (clerics), capture them, try them, punish them and expose them to the people," Ahmadinejad said.

Iranian media on Tuesday published a letter attributed to Ahmadinejad's controversial chief of staff, Esfandiar Rahim Mashaie, who supposedly ordered the finance minister to facilitate the purchase of the steel company by "Mr X".

Ahmadinejad Wednesday rejected the accusation and warned his political enemies that he would not forever remain "silent."

"They want to accuse the cleanest government in Iran's history through a media and political war, and through lies and accusations," Ahmadinejad said.

"We have kept silent so far ... but the ill-wishers should know that the government will not remain so forever," he warned.

In late June, Ahmadinejad had warned the judiciary against attacking his entourage and arresting members of his government, as he vowed to defend them.

"I consider defending the cabinet as my duty ... the cabinet is a red line and if they want to touch the cabinet, then defending it is my duty," Ahmadinejad said.

While it is not clear whether the scam's mastermind, identified by some local media as Amir Khosravi, has been arrested, the authorities say his assets have been frozen. The reports, while naming Khosravi, have given little detail concerning who he is or of his background.

Tehran-e-Emrouz daily, quoting an informed source, reported on Tuesday that two-thirds of the embezzled money has been transferred out of the country.

Iran's inspector general Mostafa Pour Mohammadi has labeled the fraud "the most unprecedented financial corruption case" in Iran's history, while influential MP Ahmad Tavakoli said the case represented "a terrible corruption disease (lurking) in the banking system and administrative apparatus."

Ahmadinejad's entourage has been at odds with the ruling hardline conservatives since April, especially Rahim Mashaie, whom they accuse of seeking to undermine the Islamic regime.

In an unprecedented move, state television did not broadcast the president's speech on Wednesday.

Government-run IRNA news agency quoted a presidency official as criticizing the absence of live coverage, saying that "despite coordination with television authorities (to air the speech) they were not available to comment," on why they did not.

The head of the Iranian state television is appointed by Islamic republic's supreme leader Ayatollah Ali Khamenei.