KUALA LUMPUR, June 6 — Malaysia is among countries used to resell Iranian oil in the Middle Eastern nation’s scheme to circumvent trade sanctions starving it of basic goods, the Financial Times (FT) reported,

The secret scheme is part of the massive corruption that allegedly took place under former Iranian president Mahmoud Ahmadinejad in which the government gave oil allocations to accomplices at large discounts, according to the FT.

These accomplices enjoyed generous commissions as long as they were able to bring back basic commodities or cash into the Middle Eastern country.

As the recruits were unknown politicians or businessmen, they could get information from back channels to sell crude oil to previous importers of Iran’s oil, or new customers, by using new transport routes.

According to the FT, the crude could be sent to Asian countries like Malaysia first, where it would either be put in storage or reloaded onto other tankers before the sale, where it would be labelled as another country’s oil.

The oil could also be sent straight to Middle Eastern neighbours Oman or Iraq, where it would be sold as though it were crude originating from the labelled countries.

Discounted spot sales were also held on tankers at sea.

The paper reported that the buyers, which could have included Asian navies or armies that did not have to account for their purchases to their governments, paid in cash.

While the policy was painted as an economic necessity to get around US and EU sanctions imposed over Iran’s defiance of its nuclear programmes, the country’s economists were quoted as saying that not all revenue from the oil sales were channelled back to the state, estimating that the amount of lost revenue could run in the billions.

FT also reported that mysterious businessman Babak Zanjani has become a symbol of Iran’s corruption under Ahmadinejad’s administration that lasted from 2005 to 2013.

The paper said some of Zanjani’s wealth was held in the First Investment Islamic Bank in Malaysia, which he reportedly said he had set up some three years back to help evade sanctions.

The businessman was reportedly arrested last December on allegations of “fraud and disruption of the country’s monetary system” and stolen oil money.

This is not the first time Malaysia’s name has surfaced in investigations into international transhipments of a questionable nature and which involve Iran.

In 2004, Malaysia was identified as the hub of Pakistani Abdul Qadeer Khan’s nuclear network.

US paper The New York Times had then reported the extent of Abdul Qadeer’s trading network, where American intelligence officials discovered cargo containers full of specialised centrifuge parts loaded into one of the nondescript vessels passing the Straits of Malacca.

The shipment of the machinery, which is necessary to enrich uranium for nuclear bombs, was sent to Dubai, where it was relabelled “used machinery”, transferred to a German-owned ship, and when it went through the Suez Canal headed for Libya, Washington had ordered it seized.