The elusive US-Iranian executive who might be defying sanctions: The Iranian shadow network

A man with close links to the hardline Iranian regime via sanctioned petrochemicals companies is behind a litigation action in the English courts which its defendants say is vexatious and revenge-driven.

The claim has been lodged by Singaporean company Alliance Petrochemical Investment (API), a 60% shareholder in the Iranian company Mehr Petrochemical Company (MHPC), which co-owns MHPC as part of a joint venture. Crucial to the background is that the US Office of Foreign Assets Control (OFAC) announced sanctions against MHPC in March 2023, settlement was later reached between OFAC and MHPC’s former owner, which outlines the “Apparent violations” by MHPC.

Leading up to this, in September 2022, a number of articles in the Iranian media reported allegations that Iran’s General Inspection Organization had uncovered multiple instances of alleged corruption and criminal behaviour at MHPC. According to those reports, MHPC owed $170 million in export currency to the Iranian government and had sizeable debts to other Iranian petrochemical companies as well, as the funds generated out of Iran do not appear to have made it back into the country.

In response, the Iranian minority shareholder of MHPC, PGPICC, reportedly appointed its own CEO to replace the one initially appointed upon the plant’s 2018 acquisition, in alleged breach of the contractual agreement between the two parties.  According to the article, PGPIC wrote a letter to Ali Shamkhani, asking him to intervene on their behalf and appoint a new CEO, which he did.

Ali Shamkhani is an Iranian two-star general and former secretary of the Supreme National Security Council, who reportedly wields significant influence in the country’s key sectors and retains strong ties to the Islamic Revolutionary Guard Corps (IRGC) since his time in the Navy during the 1980s.

On 17 August 2023, API entered into a settlement agreement with MHPC, whereby it agreed to pay close to EUR 144 million to the plant and ultimately the Iranian government. Now API has submitted a claim to the High Court alleging that the defendants, London-based investors Francesco Mazzagatti and Francesco Dixit Dominus, diverted this exact amount from API through forged documents for their own benefit.

Based on the defence statement, however, this is a far less clear-cut case, one which shines a  light onto Arshiya Jahanpour, a dual US-Iranian citizen who is supposedly the sole controller of API, directing its operations and decisions, since September 2018. The defence alleges as API’s shadow director and ultimate  go ahead beneficiary, Mr Jahanpour is believed to be the steering hand in the court action.

It was allegedly Mr Jahanpour who actively facilitated transactions between MHPC and third parties, in direct violation of US sanctions prohibiting US citizens from engaging in business trade and investment activities involving Iranian goods. Furthermore, it is alleged those US sanctions prohibitions separately apply to Mr Jahanpour through the transactions and dealings of API when that entity was majority-owned by him.

According to the defence statement, Mr Jahanpour has repeatedly sought to hide his involvement in relevant matters, including purchasing 50% of API through his mother and a company in her name but beneficially owned by him, where he also signed the share purchase agreement as guarantor, “being the son of the Purchaser, and conditional on the Guarantor guaranteeing the obligations of the Purchaser under this Agreement.”

Interestingly, this clause is, the defence highlights, the single differentiating factor from the share purchase agreement that Mr Mazzagatti signed with the purchaser of the remaining 50% of API, which does not involve a guarantor.

Meanwhile, Hossein Shamkhani, the son of Ali Shamkhani and founder of Admiral Group, has, as reported in Iranian media, been embroiled in allegations concerning a corruption scandal involving PGPICC, along with some of Iran’s most influential money exchangers that have, so it has been reported, been helping the regime bypass international sanctions.

Given the US designation of the IRGC as a terrorist organisation, 19 sources considered Admiral Group ultimately implicated in terror financing. MHPC itself has been designated as a sanctioned entity through its association with PGPICC, whereby it has been identified as belonging to a vast network of front companies operating in Hong Kong, Singapore and the UAE, run by foreign exchange houses in Iran and the UAE. This network enabled PGPICC to orchestrate the sale of billions of dollars’ worth of petrochemicals from Iran-based companies such as MHPC to buyers overseas, all while concealing its involvement in these sales.

In 2022 alone, PGPICC is said to have marketed millions of dollars of high-density polyethylene produced by MHPC to third-party buyers for delivery to Turkey and Asia. Interestingly, the defendants’ defence document states that some of the payments attributed to them “relate to product which API received from MHPC and which Mr Jahanpour arranged to be sold to customers in Turkey.”

The entity which it is being claimed is being used for such transactions is Turkish Starex Dis Ticaret Kimya Anonim Sirketi (Starex Turkey). An independent search of Sayari, a counterparty and supply chain risk intelligence platform, revealed that Starex Turkey’s UAE counterpart, Starex International FZE, had received 11 shipments of sanctioned oil products from Russia during 2023 and 2024. Furthermore, the data is claimed to show 31 shipments of sanctioned petroleum products from Starex to the heavily sanctioned Reliance Industries Limited or to the petroleum suppliers within Russia.

As detailed in the Bloomberg Report published in August this year, Hossein’s Admiral Group Shipping Company, based in the UAE, is claimed by Bloomberg to be a key IRGC front used for oil smuggling out of Iran and Russia, as well as the illegal arms trade.

All of this casts an uncomfortable spotlight on Jahanpour, who is also said to possess a Turkish passport. The labyrinthine company structure, the defence says, exists to not only evade sanctions which should rightly be imposed, but also to avoid directly connecting Mr Jahanpour and his business activities to the Iranian regime.

Seen from this perspective, the fact that someone so intimately connected to the extremist Iranian religious hierarchy and their military machine is being allowed to take court action in London seems deserving of closer scrutiny.

Alarmingly, if Mr Jahanpour succeeds, it is claimed in the defence statement that there could be grave consequences for the UK.

Mr Mazzagatti and Mr Dixit are respectively the CEO and CFO of Viaro Energy, which earlier this year announced an agreement with Shell and ExxonMobil for the acquisition of a 100% working interest in the Shell-operated UK Southern North Sea assets owned by the two oil giants.

Under the terms of the deal, Viaro Energy will assume full ownership of one of the largest and longest producing gas asset portfolios in the UKCS, including high-quality, well-maintained production facilities and the Bacton gas receiving terminal.

Any threat to that deal, as a result of Mr Jahanpour’s action, could be damaging to the UK’s energy security, it has been claimed.

The only reason this might happen, according to defence documents, is that Mr Jahanpour remains bitterly angry that he failed to secure the right to 100% ownership of API in September 2018.

As referred to in the defence, his claim against Mr Mazzagatti and Mr Dixit is part of his broader and ‘vexatious campaign’ to eliminate opposition and achieve full control over API, leveraging the English courts in an attempt to achieve this.

In launching his vendetta, Mr Jahanpour is said to have engaged in continual and calculated harassment against the defendants, in particular Mr Mazzagatti.

As indicated in the defence, for someone who enjoys a lavish lifestyle in a string of luxury properties including an exclusive $1500-a-night Dubai hotel suite and a valuable property in Knightsbridge, London, it seems perverse to devote so much time to enacting revenge against former business associates.

It is an action which, perhaps deliberately, distracts from the discomforting accusation of underhand dealings with the Iranian regime and MHPC’s crucial position for the furtherance of their strategic objectives.

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