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Last Updated: Tuesday, 28 September, 2004, 22:59 GMT 23:59 UK
Clashes as Iran Islamic fund fails
One person was killed and 18 injured in clashes in Iran linked to the collapse of an Islamic loan fund in Nourabad, Iranian state television has reported.

The violence is reported to have taken place after angry customers protested outside state offices in the city.

The Zolfaghar-Ali fund was declared bankrupt, leaving some customers unable to reclaim funds they had deposited.

One report said Nourabad residents had 360bn riyals ($41m; 23m) tied up in the fund.

Vulnerable

A Fars state official told Iranian television that security forces had intervened to quell the protests and calm had been restored.

Damage was caused to some buildings by "a group of agitators and opportunists", said Abdollah Shahasani, head of political affairs in the office of the Fars governor general.

He said the fund's managers had been arrested and a special committee was investigating customer complaints.

Similarly structured Islamic funds allow depositors after several months to take interest-free loans of double the amount deposited.

Fund managers invest the cash deposited but can be vulnerable to a run on the fund if too many depositors try to take loans or withdraw their deposits at once.

Several such funds have collapsed in recent months, causing street protests, AFP news agency said.


SEE ALSO:
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