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LONDON (Reuters) - Iraq's grain board chief has been removed from his post and replaced by a man who was previously sacked from the position, trade ministry officials said on Friday.
Trade Minister Milas Mohammed Abdul Kareem removed Grain Board Director General Hassan Ibrahim from his position on Thursday, three ministry officials, including a senior official, told Reuters.
These officials said Ibrahim was removed because of his alleged role in a spoiled rice shipment.
Ibrahim, who has spent most of his 33-year career as a civil servant in the country's grains industry, confirmed to Reuters that he no longer held his post but disputed the account of the ministry sources as to why he was removed.
Ibrahim did not comment on the disputed rice shipment but he dismissed the account of his removal given by ministry officials as "completely wrong.”
Ibrahim was replaced by Muthanna Jabbar, who himself held the position until 2009 when he was removed in a corruption scandal involving kickbacks in sugar deals and a damaged tea cargo.
Jabbar, who has denied any wrongdoing, declined to comment on his return to the Grain Board.
The trade minister's move comes at a time when government forces are battling Islamic State militants who swept through the north of the country in June almost unopposed by the Iraqi army.
The presence of the ultra-hardline Sunni insurgents in Iraq is expected to boost grain imports by the government because the militants gained control of more than a half million tonnes of wheat and are managing to mill flour and distribute it, after seizing state silos and mills.
Islamic State is using wheat in a bid to win over Iraqis and as an economic weapon to deprive anyone it believes is an infidel from having the commodity, while oil products and kidnapping for ransom provide funding for their operations.
The militants are hoping their management of the staple food item will help make their self-proclaimed caliphate self-sufficient.
If they succeed, particularly with the planting season now in full swing, it could give them influence among some Iraqis in Sunni areas who depend on the commodity, though executions and beheadings have alienated people who once welcomed them.
Meanwhile, the central government, already struggling with raging sectarian violence and a weak economy, risks losing credibility if its management of a strategic food item erodes.
The Board imports millions of tonnes of wheat and rice yearly. The United Nations Food and Agriculture Organisation predicts Iraq's import needs will grow given "conflict-related challenges to production, storage, and other logistical arrangements", it said in a recent report.
Millions of Iraqis depend on the government's extensive subsidized food system, which is managed by the trade ministry.
Though it has long been criticized by the international community for being wasteful and corrupt, the U.N. has recently warned that food insecurity is deepening due to the disruption of the system amid raging conflict in northern and western Iraq.
The ministry sources said Abdul Kareem acted against Ibrahim after launching an investigation last weekend into the allegedly spoiled rice shipment.
"Relying on the findings of the investigation team on the corrupted rice shipment, the Trade Minister ordered on Thursday (the removal) of the Grain Board chief and appoint Muthanna Jabbar as the new head", the senior official said.
Ibrahim said he had been moved to the post of Director General of the State Company for Fairs and Commercial Services - another state-owned company that is part of the Trade Ministry.
His replacement Jabbar was himself sacked in 2009 when Iraq's Integrity Committee issued arrest warrants for him along with two brothers of then-Trade Minister Abdul Falah al-Sudany. Ibrahim then took over as Director General.
Iraq's Integrity Commission said it had solid evidence that the trade minister and his two brothers were taking kickbacks in sugar deals and approving a large tea cargo that turned out to be damaged.
A gunfight broke out between Trade Ministry guards and forces who attempted to arrest Jabbar, the two brothers and suspected ministry officials in 2009.
The minister was arrested and released on bail. He and his two brothers fled the country.
The Trade Ministry denied wrongdoing, saying critics or disgruntled former employees wanted to sully its reputation.
The commission also accused Jabbar of being part of a corrupt ring inside the ministry.
Some of the allegations against Jabbar were linked to allegations of kickbacks or corruption involving expired or dangerous food discovered in state warehouses in southern Iraq, accusations he denied.
Ibrahim has been vocal about the government's commitment to continuing to pay its staff who are still working in state silos and mills in Islamic State-held areas.
Editing by Michael Georgy and Ken Wills