Coll 28/16 ‘Persia; Imperial Bank of Persia; relations with the Persian Government.’ [‎10r] (19/247)

THIS DOCUMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOVERNMENT
[ r. z .
PERSIA.
5245
June 22, 1935.
CONFIDENTIAL.
rL L.'
Section 1.
[E 3866/3441/34]
Mr. Eldrid to Sir L. Oliphant.—(Received June ' 2 ' 2 .)
Imperial Bank of Persia,
Dear Sir Lancelot, London, June 19, 1935.
BANK royalties.
Since my letter of the 27th October, 1933, on this subject there has been little
in the occasional discussions which have taken place in Tehran between
subordinate officials of the Ministry of Finance and our chief manager that was
worth reporting to you.
We have consistently maintained our previous attitude, namely, that legal
authority of high standing supported our view that the interpretation “net
profits means that which remained after all expenses, taxes and other charges
in whatsoever country incurred, had been deducted from gross profits.
Recently, however, the Minister of Finance has become insistent upon a
settlement being reached and on the 11 th ultimo wrote to the chief manager
demanding, within one month, payment of the so-called arrears of taxes. At
the same time the Minister asked to be supplied with a statement showing the
amount of the taxes under discussion.
I am forwarding, for your information, a translation of the Minister’s
letter, () also a copy of the chairman s reply of the 12 th June to his Excellency,
together with a copy of the statement(‘) prepared and certified by the Bank’s
auditors setting forth the net profits of the bank, and other details, from the
inception of the bank of 1931, when royalty became no longer payable.
Here the position remains until we receive a reply from the Minister.
There is another matter I should like to mention, namely, that, having been
granted a supplement to our charter authorising the change in the bank’s name
to “The Imperial Bank of Iran,” we are placing special resolutions before
shareholders of the bank at an extraordinary general meeting to be held on the
28th instant, following our annual general meeting. I enclose a copy of our
letter to shareholders dealing with this change. 0
Yours sincerely,
E. M. ELDRID.
Enclosure.
Mr. Barnes to Minister of Finance {Tehran).
Your Excellency, ^ June 12 , 1935.
Mr. BUTTERS, our chief manager, has forwarded to the board of directors
a translation of your letter to him of the list May last, which has received their
careful attention.
We deeply regret that there should be any disagreement between the Iranian
Government and the Imperial Bank, which has served the country for some
forty-six years, and has endeavoured to implement its concession not only in the
letter but in the spirit in which it conceives it to have been granted.
The board adhere to the view stated in their notes of the 8 th June, 1932,
and the 28th November, 1933, in which it will be remembered they were supported
by high legal authority that the interpretation “net profits’’ in article 7 means
that which remained after all expenses, taxes and other charges, in whatsoever
country incurred, had been deducted from gross profits. Although it holds a
concession from the Government of Iran, the bank is an English company
established by a British Royal Charter of Incorporation, and the net profits
( x ) Not printed.
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