Goldman Sachs US$2 billion Sukuk facing heat (by IFN)

SEE IFN: Goldman Sachs’ US$2 billion debut Sukuk program continues to attract controversy as news emerged that three Shariah scholars named in its prospectus as potential endorsers of the papers have not responded to requests to participate in the compliance approval process.

The program’s Shariah compliance has been mired in doubt following questions first raised in a report in Islamic Finance news, (Vol 8, Issue 47), on the 30thNovember last year.

In the latest development, Asim Khan, the managing director of Dar Al Istithmar, which is the Shariah advisor on the deal, said that the scholars comprise Dr Daud Bakar, the president and CEO of Amanie Business Solutions, Shaikh Abdulla Sulaiman Al Manea, the deputy chairman of the Shariah board at AAOIFI and Dr Mohamed Ali Elgari, a professor of Islamic economics.

However, Asim said that their lack of cooperation has no bearing on the Sukuk’s Shariah compliance. “Given that the issuance was not to take place at that stage and this was only a preliminary prospectus, it was appropriate not to pre-judge the eventual outcome or speculate which Shariah scholars would eventually be able to consider, evaluate and sign off on the Shariah compliance of this complex transaction,” Asim was quoted as saying.

According to the Sukuk’s prospectus: “A group of Shariah scholars composed of, among others, members of the Shariah supervisory board of the Shariah advisor may, at the request of the Shariah advisor, issue a fatwa as to their view on the Shariah compliance of the program on or about the closing date. The advising scholars are expected to be: Dr Hussain Hamed Hassan; Dr Ali Al Qaradaghi; Dr Abdul Sattar Abu Ghuddah, Dr Abdulaziz Fawzan Saleh Al Fawzan; Dr Daud Bakar; Dr Aznan Hasan; Sheikh Abdullah Sulaiman Al Manea; and Dr Mohamed Ali Elgari.”

Meanwhile, two scholars, who have declined to be identified, have reportedly expressed surprise and concern over the listing of their names in the prospectus.
However, Goldman has continued to stand by the compliance of the program, commenting to Islamic Finance news that: “We are entirely confident in the opinion we received that our program is in compliance with Shariah laws.”