Head of Iran's stock exchange resigns amid loan scandal

Majid Eshghi, head of Iran’s Securities and Exchange Organization, has officially stepped down following the public outcry over the revelation of billion-rial loans granted to him and several board members at low interest rates.

The resignation came after Shargh daily, a pro-reform newspaper in Tehran, exposed the personal loans, totaling 105 billion rials ($175,000), sparking widespread outrage.

These officials, appointed during President Ebrahim Raisi’s tenure, approved the loans in the final days of his government, bypassing orders from acting president Mohammad Mokhber and president-elect Masoud Pezeshkian. Experts warn that this move undermines investor confidence and further destabilizes Iran’s struggling capital market.

Eshghi personally received the largest share of the loans—27 billion rials ($45,000)—with a lenient 4% interest rate and a 10-year repayment plan. To put this into perspective, an ordinary Iranian worker earns just $200 a month, highlighting the extreme disparity in access to financial resources.

The loans, initially justified by Eshghi as being "in accordance with laws and regulations" approved by the Supreme Council of the Stock Exchange, have been met with skepticism. Eshghi defended the decision, stating, “The claim that the board of directors approved loans for themselves is a big lie." He argued that the council is responsible for determining board salaries and benefits, and the loan amounts were based on official resolutions.

Despite these defenses, critics were not convinced. The scandal has been dubbed the "Eshghi Loan" and sparked backlash across political lines. Conservative political activist Mohammad Mohajeri called out the government’s audacity, stating, “Not only astronomical loans, but also astronomical audacity; this is what corruption did to the Raisi administration!"

Alireza Salimi, a member of the Iranian Parliament, responded on the social network X, writing: "I once mentioned in parliament that Mr. Eshghi is running the stock exchange based on personal whims. He sent a legion of reporters to attack me to whitewash his performance."

Salimi added, "Now it turns out Eshqi has indeed been taking billions in low-interest loans for himself."

One user on X shared a photo of the Tehran Stock Exchange board and commented: "They ask why the stock market is always in the red. Well, maybe if they gave fewer of these loans to board members, the market might turn a bit green."

The incident has further fueled criticism of Iran's broader financial system, which is already under fire for granting exorbitant loans to bank employees and subsidiaries. A recent report by Iran’s Central Bank revealed that in 2023 alone, major banks funneled over 9,100 trillion rials ($1.5 billion) to their own employees and executives, while ordinary citizens struggle to secure basic loans for housing, marriage, or small businesses.

As Iran’s economy crumbles under the weight of corruption, mismanagement and sanctions, the elite continue to enrich themselves, leaving ordinary citizens to bear the burden of inflation, poverty, and unemployment. According to observers, Eshghi’s resignation, while symbolic, may do little to restore public trust in a system marred by “kleptocracy”.

This is not the first instance of Iranian officials abusing their positions or embezzling public funds. In many cases, there has been no follow-up or report on whether they were made to return their illicit gains. Similarly, in this latest case, despite widespread criticism, there has been no discussion of requiring them to repay the loan if it was unlawfully allocated.