Business: III Omen

Now Iran challenges contracts

Ever since the followers of Ayatullah Ruhollah Khomeini seized power in Iran four months ago, many foreign companies have been haunted by a worry:

Would Tehran's avowedly anti-Western regime honor the contracts for providing modern new industries and services signed during the Shah's long buying spree? The first strong hint came last week, and it was not encouraging—especially for U.S. firms, which hold an estimated $10 billion in Iranian orders.

In a sudden move, a Tehran court handed down a ten-day injunction blocking further payments to General Telephone & Electronics, which has been drawing down a huge letter of credit...

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