The chiefs of two major Iranian banks have lost their jobs over a $2.6 billion fraud case that's being described as Iran's biggest embezzlement case ever, according to Iranian news agencies.
Bank Melli chief Mahmoud-Reza Khavari and Bank Saderat head Mohammad Jahromi are both believed to have lost their jobs over the scandal.
Khavari submitted his resignation on September 27 to Economy Minister Sadreddin Mohammadi, who accepted it. In letter, Khavari apologized to Iran's Supreme Leader Ali Khamenei and the Iranian people, and said he was resigning out of respect to public opinion.
Khavari admitted that Bank Melli had some involvement in the fraud but accused Bank Saderat of committing the bulk of wrongdoing.
Bank Saderat head Mohammad Jahromi has reportedly been dismissed by the committee charged with investigating the fraud.
Speaking last week to state media, Jahromi sought to clarify his bank's role in the scandal.
"It's not correct to call it embezzlement from Iran's Saderat Bank," he said. "Maybe we can say, 'embezzlement from the banking system by forging Bank Saderat documents.' "
Iran's semi-official Fars news reported that the head of the private Bank Saman has been also ousted.
Iranian officials say the case involved the use of fraudulent documents to obtain credit at one of the country's top financial institutions that was then used to purchase assets, including state-owned companies.
So far, 22 arrest warrants have been issued for individuals who have been interrogated by the authorities.
Prosecutor General Gholamhossein Mohseni Ejei said on September 26 that several suspects are being held in temporary detention while others have been released on bail.
Ejei also said that the perpetrators of the fraud may receive the death penalty.
The scandal has rocked the country and brought increased pressure on President Mahmud Ahmadinejad, whose close aide, Esfandiar Rahim Mashaei, has been accused of having ties to the alleged mastermind of the operation.
There have also been calls for Ahmadinejad's economy minister, Sadreddin Mohammadi, to be impeached.
Lawmaker Aziz Akbarian told Fars news agency that more than 20 MPs have signed a letter calling for Mohammadi's impeachment. He was quoted as saying in an interview with the Iranian news agency,"People who have given 200,000 martyrs for this establishment do not expect to witness from it such a violation of its banking system that has aroused a public distrust of the system."
The scandal comes at a time when Ahmadinejad has been isolated as the result of a power struggle with Iran's Supreme Leader and his allies. It also comes ahead of the March parliamentary election in which the scandal and corruption is likely to become a major issue.
Ahmadinejad has denied any links to the alleged fraud and said his government is the cleanest in Iran's history.