What troubles does the government decree have for the shareholders and the people?

According to IBNA, quoting Eghtesadnews, on Monday, the Cabinet of Ministers, with the transfer of the remaining government shares in refining, industrial, insurance and banking companies worth 43.5 thousand billion Tomans to Mellat, Saderat and Trade agreed. According to the decision of the Cabinet of Ministers, 29 thousand billion Tomans of this amount will be transferred to the banks to settle the government debt and the rest, which is 14.5 thousand billion Tomans, will be transferred to the account of the targeted organization to pay subsidies for basic goods. In fact, by selling its assets, in addition to settling its debts to these three banks, the government has provided the necessary resources to pay subsidies for basic goods, which it is supposed to pay by the end of March. But the plan raises a few questions

Government approval with the permission of the National Corona Headquarters
Based on the decision of which cabinet, the Council of Ministers has decided to transfer government assets to three banks to settle debts and pay subsidies. Such decisions must be approved by the parliament, just as in the budget bills, the government obtains permission from the parliament for transfers, this time from which institution it has obtained permission for such an action.

Eqtesad News information shows that this decree was approved by the National Corona Headquarters. In fact, the National Corona Headquarters has decided to provide the necessary resources for subsidy expenses by selling government assets to three banks. It seems that after the Coordinating Council of Heads of Forces, the Corona National Headquarters has become the third pillar of the legislature alongside the parliament.

Ambiguities of government decision
In addition to the questionable decision-making process of the Corona National Headquarters, there are serious ambiguities about how government shares are valued. The main question is how and by what authority the valuation of government shares has been done? Why was the government stock sold to these three banks instead of being offered in the stock market? And have these banks been negotiated and agreed upon, or are shares going to be bought by banks on an orderly basis? Given that the three banks are required to be listed, has the satisfaction of their shareholders been obtained? The answer is no, because there is no trace of this decision in the resolutions of the assemblies of these banks.

Selling shares to which shareholder
These three banks have entered the capital market and other shares have been transferred, except for the share that is directly owned by the government. The government has mentioned in its resolution that it will transfer a part of its shares in the banks to these three banks. The question is which bank’s shares are to be transferred to these banks? If the answer is government shares in these three banks, the question is to which shareholder is the government share to be transferred? Is there a shareholding ceiling in this transfer, which is emphasized by the Central Bank? Considering that a large part of the shares of this company belong to public institutions, the management of which is indirectly in the hands of the executive managers of the country, how is it done in transferring such shares so that the rights of small shareholders are not violated?

Payment from the pockets of the future
It does not take much research to understand the plight of the people. Naturally, in a society with rising inflation, people’s lives are difficult, but how can this difficulty be taken away from the people and how can it be turned into prosperity? The first point is that any payment involves the provision of resources by the government, specifically in welfare payments the government must take into account the rights of future generations. We should not act at the cost of reducing the welfare of the future to ensure the welfare of today’s generation. National assets belong to all peoples and future generations.

What has happened is that the government wants to spend part of its national resources on a distribution policy that covers only a small part of the cost of living, and these resources do not become productive assets that future generations will enjoy. Paying 100 thousand tomans for 4 months in the best case can be spent on buying about one kilogram of red meat per month. The basic goods subsidy scheme does not provide sustainable welfare for the current generation. We are glad that it helps a part of the people. The determination of the parliament and the government to help the people in the run-up to the presidential election, if not political, is certainly not welfare policy. It is chronic, but 14,000 billion tomans are distributed from the accumulated resources without being replaced by sustainable assets. Resources that belong to all people are given to a small group and the money obtained from it is melted down in the form of distribution policy.

Shortcut to central bank resources
According to the decision of the Cabinet of Ministers, the three banks Mellat, Tejarat and Saderat must deposit 14.5 thousand billion Tomans in four installments by the end of the year to the account of the target organization to pay subsidies for basic goods.

An examination of the financial statements of the three banks shows that the two commercial and export banks have accumulated losses. Bank Saderat had an accumulated loss of 7,800 billion Tomans at the beginning of 1399. Tejarat Bank also had a accumulated loss of 10,700 billion Tomans at the beginning of the year, and at the end of the year, in the best case, its accumulated loss will reach 9,700 billion Tomans. In such circumstances, can the mentioned banks be able to pay the amount of 14 thousand and 500 billion Tomans to the organization of targeted subsidies? Is it possible to make such a heavy financial commitment? What guarantee is there that this plan will not turn into bank debt to the central bank?

It seems that financing the basic goods subsidy plan by transferring government shares to three stock exchange banks is an invisible and underground route to the central bank’s resources. A path that sounds the alarm of borrowing from the central bank under the guise of transferring government shares.

Inflationary Act
It is said that the plan to subsidize basic goods for the welfare of the people and reduce the economic pressure on the people has been proposed, but studies show that the financing of this plan will be through the transfer of shares in the government of Turmoza. According to the Central Bank, every 40,000 billion tomans increases the monetary base of the Iranian economy by 11.4 percent. As a result, out of the 14.5 thousand billion tomans that banks are obliged to pay, if only 4 thousand billion tomans become monetary, 28 thousand billion tomans will increase liquidity and will increase the monetary base by one percent. As a result, a subsidy of 100,000 Tomans will be paid at the price of increasing inflation by at least one percent.

In fact, if the resources of this plan are provided in any way by the central bank, it will have a result. On the one hand, little help has been given to the people, and on the other hand, part of their income has been lost due to rising inflation.

Bypass the main route
In the budget bill, the government has predicted that the revenue from the tax on stock transfer will be 14,000 billion tomans. Considering that the increase in the value of stock exchange transactions will increase the government’s tax revenue, why does the government not sell its shares in the stock market? Why does it not allow price discovery in the stock market? Is the Ministry of Economy worried about the stock market index? Is it right to filter a platform to maintain the index and prevent it from falling, while the philosophy of the stock exchange is to discover the price and buy and sell stocks in a transparent, legal and competitive structure. Isn’t it better for government shares to be offered and discovered at the stock exchange and for people and financial institutions to buy them in a transparent atmosphere?

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