There is always a first. Usually being a pioneer is flattering, but not always. Ask Kuwait’s Investment Dar how they feel about being tagged the first Shariah compliant company to default on its Sukuk (Islamic bond). Its official. According to a statement by the company, they failed to pay a “periodic distribution” due on April 27 to holders of its Sukuks Islamic bonds maturing in 2010. Bloomberg data suggest Investment Dar had $3.73B of total debt ountstanding as of 9/2008.
Analysts, including me, believe that this default will have significant implications because it set a precedent. Investors across the muslim world believed Shariah-compliant companies are immune from the crisis, are simply blessed, and can never default on their Sukuks. Guess what? They did and this has been nothing more than a myth ready to bust.
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Loading ...Tags: Default, Investment Dar, Islamic bond, KSE, Kuwait, Kuwait Stock Exchange, Shariah Compliant, Sukuk
I wonder if there was any financial viability in buying Aston Martin. I personally feel its more of a marketing propaganda; Investment Dar’s name being associated with the most luxurious car manufacturer.
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and one of the luxury hotel brands, Grosvenors House
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and this makes them a luxurious investment company worth 2KD.. Sorry I meant 74 Fils!
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The inside story behind these mega luxurious deals are very ugly and involves direct conflict of interest on the board level.
Money has only one face and that’s money.
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Lack of ethics, regulations, and consequences is a perfect corruption combination.
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So that’s what they’re calling interest these days?
“Periodic distribution”.
Most of the innovation in Islamic finance is in the terminological sciences.
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I had the priviledge to sit and discuss Islamic finance with Shaykh Yusuf Talal DeLorenzo:
http://www.djindexes.com/mdsidx/?event=showIslamicOverView#delorenzo
According to what I understood from him, Islamic finance isn’t about the end, but the means. We will all have to pay interest. Moreover, Islamic companies charge higher interest than conventional companies. He called the spread between conventional interest and Islamic interest COBM (Cost of Being Muslim)! He stated that he isn’t too satisfied with current applications which are more sugar-coating, but said that this is a first step in a long journey.
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I am creating a strange problem I am unable to register the rss feed, I am employing yahoo and google readers fyi.
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