Volvo quits Iran as US sanctions pressure mounts

Swedish truck maker Scania said it had cancelled all Volvo truck orders that it could not deliver to Iran by mid-August due to US sanctions. (Reuters)
Updated 25 September 2018
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Volvo quits Iran as US sanctions pressure mounts

  • Volvo cannot get paid in Iran due to US sanctions
  • Plans were for at least 5,000 trucks to be assembled in Iran Saipa Diesel says zero Volvo trucks assembled since May

STOCKHOLM, Sweden: Swedish truck maker AB Volvo has stopped assembling trucks in Iran because US sanctions are preventing it from being paid, a spokesman for the company said on Monday.
The sanctions against Iran, reimposed on Aug. 6 by US President Donald Trump after his decision to pull out of a nuclear deal with Tehran, have forced companies across Europe to reconsider their investments there.
Volvo spokesman Fredrik Ivarsson said the trucks group could no longer get paid for any parts it shipped and had therefore decided not to operate in Iran in another blow to the country’s car industry, which unlike the energy and banking sectors, had managed to sign contracts with top European firms.
“With all these sanctions and everything that the United States put (in place) ... the bank system doesn’t work in Iran. We can’t get paid ... So for now we don’t have any business (in Iran),” Ivarsson told Reuters by telephone.
Before the sanctions were reimposed, Volvo had expressed an ambition for Iran to become its main export hub for the Gulf region and North Africa markets.
The European Union has implemented a law to shield its companies, but the sanctions have deterred banks from doing business with Iranian firms as Washington can cut any that facilitate such transactions off from the US financial system.
Volvo was working with Saipa Diesel, part of Iran’s second-largest automaker SAIPA, which was assembling the Swedish firm’s heavy-duty trucks from kits shipped to Iran.
Ivarsson said Volvo had no active orders in Iran as of Monday.
A commercial department manager at Saipa Diesel confirmed that sanctions had prompted Volvo Trucks to terminate their partnership agreement.
“They have decided that due to the sanction on Iran, from (May) they couldn’t cooperate with us. We had some renovation planned in Iran for a new plant but they refused to work with us,” said the manager, who declined to be identified.
More than 3,500 Volvo trucks had been assembled by Saipa Diesel in the year to May, but none had been assembled in this financial year although the original deal was for at least 5,000 trucks, the manager told Reuters.
Swedish truckmaker Scania, which is owned by Volkswagen , said it had canceled all orders that it could not deliver by mid-August due to sanctions, while French carmaker PSA Group began to suspend its joint venture activities in Iran in June.
Germany’s Daimler has said it is closely monitoring any further developments, while carmaker Volkswagen has rejected a report that suggested it had decided against doing business in Iran. 


Malaysian court delays Goldman case on 1MDB fund theft

Updated 13 min 52 sec ago
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Malaysian court delays Goldman case on 1MDB fund theft

  • Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December
  • They are accused of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB
KUALA LUMPUR: The Malaysian case against Goldman Sachs on charges the US investment bank stole huge sums from the country’s 1MDB state fund was postponed Monday until September after defense lawyers argued there was a problem with paperwork.
Malaysia filed criminal charges against three units and two ex-employees of the Wall Street titan in December, accusing them of misappropriating $2.7 billion and other crimes in relation to bond issues they arranged for 1MDB.
Allegations that huge sums were looted from the investment vehicle — in a fraud that allegedly involved former Malaysian leader Najib Razak — contributed to the last government’s election defeat last year.
At a procedural hearing in Kuala Lumpur Monday, Goldman lawyer Hisyam Teh Poh Teik said the Hong Kong unit of the bank received its summons just last week, while the summons sent to the Singapore unit only included three out of four charges.
The third Goldman unit in the case is based in London.
He asked for three months to get further instructions from his clients, and the judge set September 30 for another procedural hearing.
Prosecutor Aaron Paul Chelliah told reporters that the prosecution believed all documents had been properly served.
“Their clients have some reservations on whether they were properly served,” he said. “Our position is they have been served.”
Goldman helped arranged bonds totaling $6.5 billion on three occasions for 1MDB, for which they earned fees said to be well above typical rates.
The bank and its former employees are accused of making false and misleading statements to misappropriate huge sums from the 2012 and 2013 bond issuances.
Goldman has vowed to fight the charges, saying the former Malaysian government and 1MDB lied to the bank.
The former bankers accused in the case are Tim Leissner and Ng Chong Hwa, and both have also been charged in the US over the scandal.
Leissner pleaded guilty in America, while Ng was extradited to the US from Malaysia in May and pleaded not guilty.