Are halal shares a marketing trick?

Raphie Hayat conducted a research on ‘Islamic finance’ concluding that this is not safer than ‘regular financing’, as is often argued.

  • Question: Is Islamic financing nothing more than a trick to attract Muslims?

Hayat: It is a bit too farfetched to call it a trick. For a company to be called ‘halal’, it has to meet strict requirements. Companies that produce alcohol or pork are excluded for example. And a company’s debt ought not to be higher than 33% of the total balance. And not more than 5% of income should be derived from interest. It is mainly because of this last requirements that shares of many regular banks can never be traded as a ‘halal’ product.

  • Question: There are clear rules. But you do warn for Islamic investment to become a marketing trick.

Hayat: Besides the Financial rules, Islam also requires companies to take into consideration the environment, to have a positive influence on society and good governance. However, these are requirements that are often not met yet. And thus until now, according to my opinion, there is no full ‘seal of quality’.

  • Question: According to the Qur’an, interest is a bad thing. But an Islamic investor does receives efficiency on his shares. Is this an example of ‘special’ Sharia interpretation?

Hayat: I disagree. Interest is forbidden, because it is not dependent upon the profit. Effiency in contrast, ís dependent upon profit. So an investor shares the risk with a company, and this is the essence of the Islamic way of doing business.

  • Question: But religious shares do not withhold the Islamic investor to take excessive risks.

Hayat: this is the responsibility of this person himself.

  • Question: You also write that a small group of Sharia scholars, that are involved in ‘halal’-certificates within Dow Jones Index and FTSE earn around 4.5 million dollar a year.

Hayat: they get paid per certificate. So I have the impression there is a tendency to apply the rules flexible. This is why I propose companies to be judged by an independent institute, for example by a institute from the Netherlands, Sweden or Switzerland.

University Paris IX Launches Sharia-Compliant Islamic Finance Master’s Degree

University Paris IX Dauphine will launch a sharia-complaint Islamic Finance program beginning in October 2009 – a topic deemed unknown and promising. Elyès Jouini, the director of Dauphine’s Institute of Finance (IFD) claims that “the demand from non-Islamic financial institutions who wants to train their collaborators in these methods for their Muslim clients is growing.”

American Muslim Chamber of Commerce established in Washington, DC

The American Muslim Chamber of Commerce (AMCC) was recently established by a committed group of American Muslim business professionals and individuals in response to the pressing need to create an organization that would respond to the growing needs of the American Muslim business community. The AMCC will become a vehicle that serves as a voice before government entities, providing strong advocacy for services and develops policies that will stimulate economic growth through business development in the Muslim American community. Washington DC resident Khalid Ahmed has been selected as the President and CEO of the AMCC, and currently serves as the managing director of US Reconstruction and Development Corporation.

Charity Guilty of Funding Terrorism

The Muslim charity “The Holy Land Foundation” and five of its former leaders have been convicted of funding the Palestinian militant group Hamas, designated a terrorist group in the US.

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UK Islamic banks to double in five years

With the Sharia-compliant market growing by up to 15 per cent a year and estimated to be worth a trillion dollars (Dh3.67tn) by 2010, the number of Islamic investment banks in the UK is predicted to double within five years, said Samer Merhi, the executive director of the Gatehouse Bank, an Islamic finance house based in the UK. “It has the potential to grow because of the high demand and the interest to make the UK the international heart of Islamic finance business,” Mr Merhi said at an Islamic finance forum in Kuala Lumpur last week. Gatehouse, a subsidiary of the Securities House of Kuwait, which started operating in London in April, is one of five Islamic investment banks based in the UK. There is also one fully fledged retail bank, the Islamic Bank of Britain, which became the first independent Islamic bank in Britain to register with the Financial Services Authority (FSA) in 2004.

It was an institution established with considerable input from the Abu Dhabi Islamic Bank to give the two million-plus Muslims in the UK a bank of their own, although now more than 20 other conventional UK banks are offering customers Sharia-compliant products. With active encouragement from the government – and, particularly, then-chancellor Gordon Brown – the UK became the first EU member state to authorise Islamic banks. Though the French are now doing their best to catch up, it has maintained its lead by adopting a level regulatory playing field for both traditional and Sharia-compliant banks. David Sapsted reports.

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CFCM president notes 150 Moroccan Religious Leaders Arrive in France for Ramadan

Mohammed Moussaoui, current president of the CFCM (French Council of the Muslim Faith), noted at the beginning of Ramadan that hundreds of religious leaders, largely from Morrocco but also from Algeria and Turkey, arrived to assist in prayers in France’s 1800 mosques. Their training, along with the financing of Islam in France, remain the primary challenges for the CFCM, says Moussaoui. In the remainder of this interview with Le Monde, the CFCM leader comments on the organization’s troubles with financing and on its activities during the month of Ramadan.

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Muslim charities will undergo review process to win back donors

Muslim charities in the United State are turning to the Better Business Bureau to win back donors, and in an effort to gain back their confidence in their fundraising activities. Many such charities were hit hard after September 11th, 2001, where funds were seized and questions by the US government. Under this initiative, seven Muslim charities have already volunteered to commit to a review process designed by the BBB to validate their financial soundness and transparency. The effort is lead by Muslim Advocates, an advocacy group based in San Francisco.

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9 Suspects on Trial for Terror Plots in Paris

Safe Bourada, an Algerian with a part terrorism conviction, and eight suspected accomplices face charges for plotting attacks in Paris will stand trial in October. They are facing charges of financing terrorism and links to a « terrorist enterprise ». Bourada has previously served eight years in prison for his role as recruiter in a logistics group which helped stage bombings in the Paris Metro and elsewhere in 1995.

Investigators suspect that while he was in prison, Bourada recruited followers who became members of a France-based group known as « Ansar al-Fath » or Partisans of Victory.

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