Dear Editor, Last week's article on the Goldman Sachs Sukuk, which included comments by Asim Khan of Dar al Istithmar, left many questions unanswered. It argued that the GS Sukuk was a plain vanilla Murabahah. But Khan did not contest, so apparently conceded, that GS intends to make an immediate sell-down of $2bn of commodities for cash - as is to be expected in Tawarruq situations. This sale would not seem to be 'occasional' but more 'organized' to me.
In a Murabahah the intention of the issuer should be to finance the real economy, but in this situation it seems that this is a move designed to benefit only Goldman Sachs through a $2bn cashflow mark-up. I can also find no discussion of a 'comfort clause' namely a written guarantee from GS that this $2bn will be used only in a Shari'ah compliant way - there is no ring-fencing or oversight from the Shari'ah board. Will this Shari'ah compliant money then end up being used to pay the bonuses of GS bankers who have profiteered from Riba, or even flow through the back door into Haram businesses? After all GS is a conventional bank with no Islamic window and I did read somewhere that for general corporate purposes or to meet its financing needs GS will allow all manner of creative initiatives.
This Sukuk also tries to circumvent the proscription on trading by listing on the Irish Stock Exchange - purely to allow the creation of a market for supposedly non-tradable paper. Surely this marks the start of the design of Sukuk for users that aren't that bothered with Shari'ah compliance and augurs the conception on two parallel Sukuk markets - a secondary 'conventional Sukuk' market in 'non-tradable' Sukuk before the emergence of a bona-fide Shari'ah compliant tradable Sukuk market. This issue creates more questions than offers answers and I remain somewhat confused and mystified.
Yours sincerely,
Paul Wouters
Lawyer Antwerp Bar Association
CEO PT Senturiyon Global
Senior Foreign Counsel Azmi & Associates Law Office for EU Regulations and Islamic Wealth Management
© The Islamic Globe 2011