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July 1970 to establish lines of credit with the Export-Import
Bank and GM in favor of the Iranian Government in connection with
the purchase of the 51 locomotives from GM. In 1974 GM again
dealt with Diesel Power employees with regard to electrification
of certain sections of the railroad lines in Iran and the
possibility of substituting a GM electric locomotive for a diesel
locomotive.
However, GM viewed petitioner as being the ultimate
responsible person. For example, a 1974 letter from GM to
petitioner asks that petitioner confirm GM's understanding that
petitioner and Mr. Khalatbari had agreed to pay certain extra
expenses incurred in connection with negotiations leading to a
contract for the sale of locomotives for the Iranian State
Railways. On June 26, 1973, the Iranian State Railways sent a
letter to GM asking if Diesel Power was GM's representative for
transactions related to diesel electric locomotives and spare
parts. A CTC employee responded to GM that "Mr. Zand does want
you to reply indicating Diesel Power Trading Company is not your
representative since, in fact, I believe Caspian (CTC) is the
authorized distributor." Petitioner also responded personally
with the following suggested language to be used by GM in
replying to the Iranian State Railways, "inasmuch as, in fact,
and in truth Diesel Power is neither your representative nor
distributor in Iran":
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