Iran’s competition regulator cancels parts maker’s ownership of IKCO
Iran’s competition regulator has announced that the recent change of ownership at the country’s largest carmaker the IKCO was illegal.
An appeals board of Iran’s National Competition Council said on Tuesday that it had upheld an earlier verdict of the Council on the illegality of the majority ownership of CROUSE, a major Iranian parts maker, in the Iran Khodro Company.
The Council had issued a ruling in early March 2023 banning the presence of representatives from CROUSE and its subsidiary companies on the board of the IKCO, saying the presence violated Iran’s anti-competition regulations.
The appeals board’s upholding of the verdict came less than a week after the IKCO held a general meeting of major shareholders where CROUSE won a third seat on the company’s board and effectively became its majority owner.
CROUSE quickly appointed a new CEO for the IKCO and started to overhaul the company’s administrative and financial structure.
For months, key political and economic figures in Iran have been opposed to CROUSE’s majority ownership at IKCO, with some parliament lawmakers fiercely campaigning against it, saying the move could seriously damage IKCO’s workers and customers.
The Council said in its Tuesday statement that CROUSE’s ownership of the IKCO is illegal mainly because it would give the parts maker an unlimited access to the company’s information, adding that it would also weaken rival parts manufacturers and would lead to higher prices in the vehicle market.
The Iranian government has divested a large part of its shares in the IKCO in recent years, enabling private investors like CROUSE and its subsidiaries to gradually gain control over parts of the company.
Media reports have suggested that Iran’s second-largest carmaker Saipa is also going through the same privatization process.
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