In the words of self-styled trader Alessio Rastani in his now famous BBC interview from September this year: "Governments don't rule the world. Goldman Sachs rules the world."
And as rulers, not only has the US investment bank bought an injunction to stop the unwashed proletariat democratically camping on its doorstep in London, it is, according to a growing voice of opinion in the Islamic finance industry, trying to change the rules of Islamic finance to furnish its own needs.
The debate about the Shari'ah compliance of the proposed $2bn Sukuk from GS was covered a fortnight ago by The Islamic Globe, with the carcass being subsequently picked over by other publications and news agencies. The Shari'ah compatibility of the Sukuk hinges on three well-publicized objections. First the structure, is the Sukuk a Murabahah or the much-maligned Reverse Tawarruq? Second, could the money raised be used to pay Goldman's own staff bonuses or in non-Shari'ah compliant ways? Third, the securities could vary in value, trading at more than par on the Irish Stock Exchange, hence flouting Islamic banking rules. In the UK when our MPs were caught with their fingers in the cookie jar they used the excuse that their frauds and deceptions were "within the spirit and letter of the rules" governing Parliamentary expenses. Some individuals in the industry have claimed that GS is using the Fatwa issued by UK-based Shari'ah advisor Dar al Istithmar as tissue-paper thin cover for lots of nefarious, unethical deals behind the scenes to remain within the spirit and letter of the rules. Moreover, some of these critics say that the crafty GS lawyers have been writing the documents in such a Byzantine way as to bamboozle and mislead the Shari'ah board to misguide them and deflect them from the true nature of the issue.
This is just the sort of thing that seems to stick to GS with its litany of various controversies. But in the words of one of the MPs caught in the expenses net, Conservative Member, Anthony Steen who said that that people were "jealous" because he has a "very, very large house," maybe some of the GCC banks are a little nervous about a titan like GS wading into their protected pool; a pool where for the last 20 years not much has changed or has borne little innovation and are now conducting a smear campaign by proxy?
But hold on; let's take a little bit of heat and emotion out of the situation. The documents are there and available for everyone to see, unlike some of the issues that have slipped off the jetty in previous years. Second, the type of investor that GS usually targets has a different profile and the products they usually sell are for a western, institutional market and as such are constructed in a certain way to deal with the vagaries of European and North American personal tax and financial regulatory regimes - both of which are threadbare in the GCC where most people don't pay personal income tax and the financial centers are nascent. OK, GS could do a little more on the PR side as its statements - often the case with GS - are non-attributable, vague and deflecting and someone from GS personally involved in the Sukuk construction should come out and explain what's going on; or else the snipers will keep taking pot-shots from the sidelines. Arguably GS should take the words Franco-American disco collective, Santa Esmarelda once said: "I'm just a soul whose intentions are good; oh Lord please don't let me be misunderstood," to heart and go some way to clearing up the miscommunication of its intentions.
© The Islamic Globe 2011
