Islamic finance and Islamic banking, which are among the fastest growing financial industries in the world, are best understood in their political and cultural contexts, and by what formed their theoretical origins.
To begin with, Islamic banks are based on a corpus of doctrines called “Islamic economics,” which claims to be based on the Quran, but is actually the creation of the Islamist thinker Abu’l-A’la Mawdudi (1903-1979).
Mawdudi is both the father of Islamic economics and (together with Hassan al-Banna, founder of the Muslim Brotherhood) the father of modern political Islam. His crucial contribution to the development of Islamism has been highlighted by Seyyed Vali Reza Nasr in “Mawdudi and the Making of Islamic Revivalism,” while his role in the birth of Islamic economics has been studied by Timur Kuran in “The Genesis of Islamic Economics.”
Mawdudi, the founder in 1941 of the Islamist party, Jamaat-e-Islami, in Pakistan, was persuaded that it was necessary for Muslims to bring all aspects of life into the practice of “Islam” and submission to the will of Allah. Therefore, both the spheres of politics and economics could not be autonomous from the Quranic revelation and the Islamic tradition (sunna).
In the political field, Mawdudi asserted the need for the establishment of an Islam in which all sovereignty belongs only to Allah; thus, popular sovereignty would a usurpation of his rights. According to Mawdudi, the proclamation of faith, in which the Muslim believer affirms that “there is no God but Allah,” implies that “one should recognise no sovereign, nor accept any government, nor yet obey any law, or that one should refuse to accept the jurisdiction of any court and to carry out the command of anyone” except from Allah.
For Mawdudi, the duty of his party, the Jamaat-e-Islami, was to form an army of “Allah’s troopers,” with the goal of establishing an Islamic state where shari’a (Islamic law) could be enforced. The creation of an Islamic state was, however, just the first step: he writes, “Islam does not want to bring about this revolution in one country or a few countries. It wants to spread it to the entire world. Although it is the duty of the ‘Muslim party’ to bring this revolution first to its own nation, its ultimate goal is world revolution.”
Mawdudi, studying the French, Russian and National Socialist revolutions, was of the opinion that Islamic revolutions should have learned from them. Like Lenin, Mawdudi affirms the need for a vanguard of Allah’s army; like Trotsky, he calls for exporting the revolution worldwide.
The spread of the Islamic revolution also had to follow the example set by the Prophet Muhammad. Mawdudi affirms that:
“When every method of persuasion had failed, the Prophet took to the sword. That sword removed evil mischief, the impurities of evil and the filth of the soul. The sword did something more – it removed their blindness so that they could see the light of truth, and also cured them of their arrogance; arrogance which prevents people from accepting the truth, stiff necks and proud heads bowed with humility. As in Arabia and other countries, Islam’s expansion was so fast that within a century a quarter of the world accepted it. This conversion took place because the sword of Islam tore away the veils which had covered men’s hearts.”
To purify society from non Islamic influences (“the veils which cover our hearts”), Mawdudi also advocated the restoration of a classic tenet of Islam: the death penalty for apostasy (ridda). Mawdudi further states that such a punishment should not just be reserved for those who consciously refuse Islam, but also for all the non-practising Muslims:
“Whenever the death penalty for apostasy is enforced in a new Islamic state, then Muslims are kept within Islam’s fold. But there is a danger that a large number of hypocrites will live alongside them. They will always pose a danger of treason. My solution to the problem is this. That whenever an Islamic revolution takes place, all non-practising Muslims should, within one year, declare their turning away from Islam and get out of Muslim society. After one year all born Muslims will be considered Muslim. All Islamic laws will be enforced upon them. They will be forced to practice all the fara’id and wajibat [duties and obligations] of their religion and, if anyone then wishes to leave Islam, he will be executed.”
Advocating the necessity of emancipating knowledge from the influence of the West to give birth to a true Islamic polity, Mawdudi goes on to state: “Islam is the very antithesis of secular Western democracy.” Not only does society have to be purged from non- Islamic contaminations, but also science and knowledge. Islamic society and Islamic culture have to be pure:
David Yerushalmi charts one aspect of "the baneful work of...Western imams and their infidel advisers in business suits."
"Shariah finance: The deadly Jihadist weapon with a dollar sign," by David Yerushalmi in the Washington Examiner, December 30:
News of the recent financial meltdown of Dubai World -- a quasi-sovereign global concern that owns 77 percent of the international port manager DP World and the single largest real estate developer in Dubai known for its palm-tree shaped luxury residential developments -- raced from the business pages to the headlines of the front pages in a matter of days.
Since the first reports on Thanksgiving, the Wall Street Journal and just about every other major media outlet reported extensively on the worldwide implications of this latest financial shock wave.
What makes this story more than simply one of a massive real estate investment company gone bad is the double-edged sword so prevalent in the chase for oil-based Middle East wealth: Sovereign wealth funds and Shariah-compliant finance.
Beginning in the 1970s with the Carter-era oil embargo and accelerating during the post-9/11 $100+ oil price spikes, Persian Gulf countries like Saudi Arabia and the United Arab Emirates' wealthiest city-state of Abu Dhabi have been awash in liquidity. And, these trillion-dollar cash reserves are controlled in every case by the respective royal families, typically in sovereign or quasi-sovereign wealth funds.
Another phenomenon that followed the great oil rush of the post-9/11 era was the promotion and aggressive exportation of the Muslim Brotherhood doctrine of SCF.
The concept of SCF was articulated by men like Sayyid Qutb of Egypt and Abul Ala Maududi of Pakistan in the mid-20th century, both of whom argued for a Jihad against Westernization, and the creation of Islamic polities that would ultimately join in a hegemonic worldwide caliphate.
The goal was that of establishing Shariah not merely as the supreme law of the land, but as the supreme law of the world.
In the post-9/11 era, Western imams and their infidel advisers in business suits speaking the queen's English have understood that given the global Jihad's reliance on the dictates of Shariah to murder apostates and to terrorize the infidels into submission, SCF must be attired in a kind of progressive Western garb to attract the attention of the financial centers in London, Hong Kong and New York.
So it was that SCF became known as "ethical investing" and Western and Muslim financiers began lecturing the world that the fraud and abuse of the financial markets, such as the Enron debacle and more recently the subprime securitization meltdown, were all driven by the desire for forbidden gain through interest and gambling.
They told us that SCF was based not on forbidden interest and speculative paper assets, but profits through equity participation and sound investing in real assets.
Dubai World, a company wholly owned by the Dubai sovereign has funded itself through debt to the tune of $60 billion. The Dubai debt now in default just happens to be SCF bonds, or "sukuk."
These bonds pay interest just like their forbidden cousins in the Western markets, but the interest is put into a black box of Shariah-created fictions and "special purpose vehicles" to keep the forbidden interest off the books.
What we now see as a real estate bubble collapse in Dubai is no different and no more or less ethical than any other financial failure. But, what makes this collapse so problematic is precisely what makes SCF and sovereign wealth funds so dangerous....
Germany's first Islamic bank, a unit of Kuveyt Turk Bank of Turkey, is to open its doors in early 2010 in the southern city of Mannheim, an executive confirmed Tuesday.
Under Islamic banking principles, interest on loans is forbidden and money cannot be lent to enterprises that flout Sharia law. Instead, borrowers must offer collateral and lenders receive a share of business profits.
The unit will open by March at the latest in Mannheim, a factory city with a large ethnic Turkish population, Istanbul-based Kuveyt Turk Bank said. It would seek a full local banking licence for Germany later.
An area newspaper, Rhein Neckar Zeitung, broke the news. The bank executive, who asked not to be named, said Kuveyt Turk Bank intended to establish further branches in Germany, then in other European nations. 9...)
The Central Council of Muslims, an Islamic group, says its data show three quarters of them feel a strong bond to Islamic tradition and at least one fifth are interested in Islamic-approved investing.
The council said it was only a matter of time before German banks also realized there was a domestic retail market for Islamic banking investments, which are usually certified by Islamic scholars who review how they work to ensure they conform with Sharia.
From time to time, readers will email us asking for a list of Shariah-Compliant companies. A complete version of such a list is extremely difficult to come by.
Some of the better sources for such a listing would be the annual and semi-annual reports of the various Shariah-Compliant investment funds. These reports usually include portfolio listings, i.e. the companies in which the fund invests.
Nevertheless, as a subject for this posting, we have decided to post some of these companies. We came across this listing on the Javelin Shariah Compliant Exchange Traded Fund web site.
The proper name for this fund is the JETS Dow Jones Islamic Market International Index Fund. It is “an Exchange-Traded Fund (ETF) that seeks performance results which, before fees and expenses, correspond generally to the price and yield performance of a benchmark index that measures the investment return of Shari’ah compliant securities.”
Long time readers of SFW may recall that the Dow Jones Islamic Market Index has a checkered past. For years Dow Jones employed the Jihadist Mufti Taqi Usmani as the chair of the Shariah Advisory Board to the Index, despite the fact that they knew of his ties to militants and extremists. It wasn’t until rival Investor’s Business Daily started publishing details that they quietly severed relations with Usmani, who can only be described as a horrible person.
But this wasn’t all. The advisor to the fund was the North American Islamic Trust (NAIT), which also owns title to a large percentage of the mosques in the USA. The problem for Dow Jones became two-fold. NAIT was unmasked as a Muslim Brotherhood front group in the Holy Land Foundation terrorism financing trial and was also named an unindicted co-conspirator in that trial. It was only in the face of adverse publicity that Dow Jones decided to sever relations with NAIT.
Nevertheless, despite its suspicious past, the fund has survived, in a new form. For our readers who have asked, here are some of the largest holdings in its portfolio:
TOTAL SA
SIEMENS AG
BP PLC
NOVARTIS AG
BHP BILLITON LIMITED
ROCHE HOLDING
GLAXOSMITHKLINE PLC
TAIWAN SEMICONDUCTOR
PETROLEO BRASILEIRO
SAMSUNG ELECT
Followers of terror-free investing may recognize the top two names on this list: Total SA and Siemens. These are simply two of the worst companies on the planet and have made themselves infamous for their billions of dollars in operations which give corporate life support to the terrorist-sponsoring, genocidal maniacs in Iran.
Readers of SFW may wish to consider the activities and policies of these companies which make them Shariah Compliant when making your own investment decisions.
Islamic finance and Islamic banking, which are among the fastest growing financial industries in the world, are best understood in their political and cultural contexts, and by what formed their theoretical origins.
To begin with, Islamic banks are based on a corpus of doctrines called “Islamic economics,” which claims to be based on the Quran, but is actually the creation of the Islamist thinker Abu’l-A’la Mawdudi (1903-1979).
Mawdudi is both the father of Islamic economics and (together with Hassan al-Banna, founder of the Muslim Brotherhood) the father of modern political Islam.
Nakheel, Dubai's property developer and part of the heavily-indebted Dubai World conglomerate, has asked Nasdaq, a US stock exchange, to stop trading its bonds.
The bonds have been taken off the Dubai bourse, Nasdaq said on their website.
Markets in Dubai, part of the United Arab Emirates (UAE), had fallen 7.3 per cent by the end of trading on Monday after the Eid al-Adah holidays.
Some major securities, including the construction and banking shares, fell to almost the 10 per cent maximum allowed.
Dubai World, the emirate's investment arm, announced on Wednesday that it would seek a six-month freeze on debt repayments of almost $60 billion, prompting concerns about its economic health.
Al Jazeera's Dan Nolan, reporting from Dubai, said: "It has been a bad day here. The main bourse dropped 5.6 per cent instantly.
"Analysts said before they opened that anything more than a three per cent drop would be a disaster.
"But others are pleased that it is not the full 10 per cent drop, which was certainly possible.
"Selling orders are far outnumbering buying orders and that is of great concern.
"It is certainly worrying signs at the stock market.
"There are concerns that there will be another large decrease on the stock market tomorrow. But hopes are that it will increase next week."
Shares in the Abu Dhabi Securities Exchange, another of the UAE's seven emirates, dropped by 7.4 per cent early on Monday, due to Dubai's debt crisis.
Abu Dhabi, the oil-rich capital of the UAE, said on Sunday that would shore up Dubai's finances on a case-by-case basis, while the UAE said that it would offer emergency support to the region's banks.
Abu Dhabi has already provided $15 billion in assistance to Dubai this year.
Nakheel said that it wanted to halt trading in its three Islamic bonds, or sukuk, until it can provide the market with a complete picture of its restructuring plans.
The bonds are worth $5.25 billion.
Asian markets rose on Monday between 1.7 and 2.7 per cent on average, with bank and construction shares, big losers last week, leading the turnaround.
Global stock markets had taken a nosedive last Friday, triggered by news of Dubai's request for a debt repayment freeze.
However, Monday's tentative recovery came as investors' nerves steadied on hopes that the fallout from a potential default will be limited.
Francis Lun, general manager of Fullbright Securities in Hong Kong, told Al Jazeera: "A lot of Chinese companies are major contractors in the Middle East.
"Now that a crisis has hit Dubai World, I think that many of these construction companies will have to wind up their operations in the Middle East. So it will be a big hit for them."
A DEFAULT by Dubai will put the world of Islamic finance to the test at a time when hard questions are being asked by bankers and lawyers about the protection afforded by financial instruments that are Shariah compliant.
The bond that lies at the heart of the threat of default and financial ignominy for Dubai is a sukuk, an instrument invented by bankers and Islamic scholars to comply with a Shariah (Islamic law) prohibition against the payment of interest on money.
Islamic finance has five pillars: a ban on interest, a ban on speculation, a ban on haram (forbidden) investments, such as pork or gambling, the requirement of partnership or sharing of profit and loss and the requirement of asset backing. Getting round the ban on interest is the problem and opportunity of Islamic finance.
A bond that doesn't (in theory) pay interest sounds unattractive but in the Gulf and Malaysia, Islamic finance has flourished over the past decade.
Typically, interest is expressed as a share in a profit, such as the rent paid for use of a property or asset. According to estimates by HSBC Amanah, the Islamic arm of the British bank, outstanding Islamic finance debt is worth $US822 billion ($902 billion).
Even Western investors have been persuaded to dip their toes in the exotic financial tool, tempted by the deep pool of petrodollars available in the Gulf.
Only days before Dubai revealed its bombshell - a threat of possible default on Nakheel's $US4 billion sukuk - GE Capital, the American financial services group, issued the first sukuk by a Western company, raising $US500 million.
The underpinning of a sukuk with assets makes it attractive for use in property lending or asset leasing. The sukuk issued by GE this week was a loan for aircraft leasing.
GE's decision to use the Islamic finance market for funds reflected renewed confidence in a market that had almost collapsed after expansion in 2007 when the Gulf was awash with money fuelled by high oil prices.
Demand shrivelled after the collapse of Lehman Brothers with only $US16 billion issued last year. More importantly, fears surfaced that sukuk failed to provide the same legal protection as conventional bonds. To date, the legal structure of sukuk has never been tested in a court.
There have been high-profile defaults, including the Saudi Arabian Saad Group and Investment Dar, a Kuwaiti Islamic Investment Fund. Investment Dar owns half of Aston Martin, the luxury British car company, and the fund failed to make a payment in April on a $US100 million sukuk issue. In June, Golden Belt, a $US650 million issue by Saad Group, the investment house controlled by Maan al-Sanea, was downgraded to default status.
The concern is that sukuk creditors may not be protected. According to Neale Downes, a Bahrain-resident partner at Trowers & Hamlins, the law firm, it is not clear how creditors will rank in an insolvency.
In some cases, he said that investors have found themselves competing against other creditors, rather than being able to enforce their claim on the underlying asset supporting the sukuk.
But the repeated declarations of support by Dubai's ruler gave the market confidence that the sovereign would stand behind its debts. Only a month before the Nakheel shock, Dubai raised $US2 billion in sukuk issues.
Many Lloyds TSB customers are being hit with charges of up to £200 a month if they go into the red - while Muslims who use the bank are only being charged £15.
The part-nationalised bank has been accused of religious discrimination over the disparity between overdraft charges on its standard current account and its Islamic account.
The Islamic account was set up by the high street bank to attract Muslim customers by allowing them to keep faithful to their religion.
Sharia law does not permit the payment of interest so the 'typical' Islamic account at Lloyds TSB has been set up without an overdraft facility.
If a Muslim customer who has insufficient funds in the account tries to make a payment, it is blocked and a 'return item fee' is charged.
However, on some Islamic accounts such a payment is authorised and an 'unplanned overdraft fee' of £15 is then levied.
The bank says this is a management fee, not a payment of interest, so does not contradict Sharia law.
Meanwhile, customers with standard current accounts who go into the red by at least £100 without authorisation are hit with an 'unplanned overdraft fee' of £20 a day for a maximum of ten days. This could mean a customer has to pay £200 in one month.
The Islamic account is available to all customers at Lloyds TSB. In theory, anyone who does not need a permanent overdraft facility could switch to this account to avoid being hit by interest charges for going into the red.
The disparity between the two accounts emerged after the bank sent its customers a booklet this month explaining its charges. Read more here ...
Islamic banks have been crowing of late how well they weathered the financial tumult of the past year but that should not blind investors to the risks associated with these houses. The trouble was already apparent in the 1990s, as Clement M. Henry and Rodney Wilson tell what happened in their book The Politics of Islamic Finance, p. 34:
The once-booming market for Islamic-friendly bonds, having suffered a contraction amid the credit crisis, now faces a new challenge: default. The fledgling market in recent months experienced its first two defaults, and they aren't expected to be the last as issuers like Saad Group hit financial difficulties. This is taking investors and courts into uncharted territory as they seek to apply Western laws to bonds that were designed to comply with Islamic law, or Shariah. …
In October, East Cameron Gas Co. filed for bankruptcy protection after its offshore Louisiana oil and gas wells failed to yield the expected returns, partly because of hurricane damage. Some $167.8 million of sukuk bonds were affected. And last month, Investment Dar Co., a Kuwaiti investment company that owns a 50% stake in luxury-car maker Aston Martin Lagonda Ltd., missed a payment on a $100 million sukuk, becoming the first company from the Middle East to default on Islamic bonds. …
In what could prove to be a test case, a bankruptcy judge in Louisiana is deciding the fate of holders of bonds tied to bankrupt energy firm East Cameron Partners LP, which in 2006 became the first U.S. company to issue the most popular type of Islamic-friendly instrument, known as a sukuk. One question: whether the bondholders actually own a portion of the company's oil and gas. As such cases work their way through courts, or are resolved without court intervention, "they may give some guidance to investors on the default of sukuk and how this would be resolved," says Mohamed Damak, an analyst with ratings firm Standard & Poor's in Paris.
When a pro-terrorist organization announces its intention to launch a financial jihad against the West, it is well worth learning their methods. More significant than the promotion of a religious pseudo-financial scheme is the possibility their largely unregulated practices could release a new wave of toxic assets into the wider economy and trigger a series of small-scale Enrons.
The Muslim organization Hizb Ut Tahrir capitalizes on Muslim Brotherhood founder Hassan al-Banna's 20th century derivative, encouraging followers to build a parallel financial structure. Al-Banna envisioned the resultant Shari'a-compliant finance as a “back door” into Western financial markets and institutions through which to supplant liberty and prosperity with Islam. Muslim clerics including MB spiritual leader Yusuf al-Qaradawi promote Shari'a finance as generally safer than Western investments, a diversification method to steady personal assets -- and a stable economic system that should replace capitalism. Call it “financial replacement theology,” if you wish.
In July, Hizb Ut Tahrir plans to launch its U.S. arm with a huge Chicago “Khalifah conference” heralding the coming Caliphate and global Islamic supremacism. After 9/11, Germany and Sweden outlawed Hizb Ut Tahrir. In July 2005, Pakistan's then-president Pervez Musharaf warned Britain not to tolerate its continued U.K. presence. But in the U.S., Hizb Ut Tahrir has proudly announced intentions to replace capitalism with Islam. Read more ...
That great comic Lenin once observed that the bourgeoisie was so cravenly addicted to the profit motive that its members would happily sell Communist revolutionaries the rope with which they were to be hanged.
I couldn’t help thinking of that when a friend sent me a press release from the Dow Jones News Services yesterday proudly announcing that February marked the “10th anniversary of the launch of the Dow Jones Islamic Market (DJIM) Indexes.”
That’s right folks, mighty Dow Jones, publisher of The Wall Street Journal , also hosts an index “to measure the performance of a global universe of Shari’ah-compliant investable equities.”
“Shari’ah-compliant investable equities”–let’s see, that would be entities that comply with the dictates of Sharia (we infidels can skip the apostrophe), i.e., Islamic law, i.e., the charming code that tells you how and where to go about obtaining multiple wives, what offenses merit flogging, amputation of a hand or foot, or even what another friend of mine refers to as “the full Muslim.”
What John Prestbo, editor and executive director of the Dow Jones Indexes, refers to as “this thrilling indexing initiative” has apparently been a smashing success, not least because of input of the Dow Jones Islamic Market Index Shari’ah Supervisory Board, a six-member group of Islamic scholars. (I wonder if Omar Abdel Rahman has an honorary seat?) Read more ...
Staying true to the lack of disclosure rampant in the Shariah-Compliant Finance industry, no mention has been made of this on Passport’s American web site…
It's about time. Chicago investment firm, Sunrise Equities, shut their doors back in mid-August, leaving investors confused, worried and angry. Salman Ibrahim, CEO, and other officers vanished. They left Chicago - and probably the US - with about $80 million of investors' money. Most investors have been totally destroyed by the scandal, and now, finally, two months later, the "Illinois Secretary of State's office filed a temporary order of prohibition against the missing CEO and president of a shariah-compliant investment firm."
"A spokesman for Jesse White's office said state investigators have gathered sufficient evidence to believe there was a violation of securities law."
"Sufficient evidence," they say, casually. How about this for sufficient evidence: CEO and top officers vanish; doors locked; phone calls not being returned; investors not getting scheduled check. What the hell was the State of Illinois waiting for?
Let me veer onto a side street for a moment. Perhaps the Illinois Secretary of State was afraid of being called a religious bigot for going after a Muslim company. I'm being sarcastic, of course, but believe it or not,there really are lunatics out there who accuse me and other writerswho are covering this of targeting Sunrise Equities. The Bench, and others writing about it, have noted that the investors - most of whom are Muslim - have been violated. We believe and hope that they get relief and justice. This is a case of Muslims being screwed by fellow Muslims. How, then, is it bigoted to simply report that?
Chicago Journal continues:
"Investors noticed something awry when they stopped receiving monthly disbursement checks from the investment firm in August. The firm's corporate officers and employees also stopped returning investors' calls, which investors said was highly unusual."
Sure, but not "unusual" enough, apparently, for the State of Illinois to jump on right away.
"The temporary order names Sunrise Equities Inc. and Sunrise Management II. The firm also did business as the Sunrise Development Group and Sunrise Development Inc., with addresses at 6355 N. Claremont, 1000 W. Monroe and 1023 W. Madison.
"In addition to Ibrahim, the order lists company founders Amjed Mahmood, of Des Plaines, and physician Mohammed Akbar Zahid, of Chicago. Both appear on the company's Web site as the senior vice presidents of construction and community relations, respectively. Saquib Anwar, also named as a "respondent," is listed as an employee and sales agent of Sunrise.
"The temporary order alleges that Ibrahim and others failed to register securities and committed fraud in the sale of securities."
The Chicago Journal also noted that, "No one has seen or heard from Salman Ibrahim, the president and CEO of Sunrise Equities since August. Salman, whose last known address is the 5600 block of W. Eddy, has been accused of allegedly bilking hundreds of investors from West Ridge's Indian-Pakistani community and from around the world. Investors' losses are estimated between $50 million and $80 million."
The credit-card company pairs with Eoncap Islamic Bank to launch a Shariah compliant debit card with ATM functions
By Lara Wozniak
MasterCard Worldwide and EonCap Islamic Bank (a member of Malaysia's Eon Bank Group) have jointly launched what they are billing as the world's first Islamic debit MasterCard - the EonCap Islamic Debit MasterCard.
The EonCap Islamic Debit MasterCard is basically a debit card with ATM functions as well. It also works on PayPass systems, which enables a person to swipe it on a terminal without the card leaving the cardholder's hand. It is referred to as blending traditional purchasing power with modern technology and is Shari'ah compliant.
"It is designed to appeal to both Muslim and non-Muslim individuals who prefer better financial control as the card ensures that purchases are automatically deducted from the cardholder's account and approved only if enough funds exist within the account. It helps track spending, comes with worldwide acceptance at more than 26 million locations and can be used at an ATM for e-banking," says Fozia Amanulla, chief executive officer of Eoncap Islamic Bank. Read more ...
If you care about the rise of Islam and the power that it is wielding in business and finance, you will immediately sign the Say NO to Shariah Compliant Finance! petition that has just started circulating around the Internet. Please, please, after you sign it, forward the online petition to your family, friends, business associates, absolutely everyone you can think of! Read more ...
Caribou Coffee became a public company after our initial public offering priced on September 28, 2005.
Our majority shareholder since 2000 is an affiliate of Arcapita Bank B.S.C.(c), a global investment group founded in 1997 with offices in Atlanta, London and Bahrain, a strong U.S. ally in the Middle East and the headquarters of the U.S. Navy's 5 th Fleet. Following our initial public offering, Arcapita continues to own approximately 61% of our outstanding common stock.
Arcapita Bank has provided Caribou with the necessary resources for continuing to expand our store base in the U.S. Arcapita has total assets of over $1.2 billion and has executed transactions valued at over $7 billion in three main lines of business – corporate investment (private equity), real estate investment and asset-based investment. Arcapita's corporate investment line of business has invested over $1 billion in equity across 17 transactions totaling over $2 billion in transaction value. Current and past corporate investments span a broad range of industries, including consumer products, healthcare, specialized manufacturing and technology. Portfolio companies include Cypress Communications (a telecommunications provider), Church's Chicken (a quick service restaurant chain), Cirrus Industries (a general aviation aircraft manufacturer), Loehmann's (a specialty retailer) and TLC Health Care Services (a national home nursing provider).
Arcapita, whose investors are located primarily in the Middle East, makes its investments in a manner consistent with the body of Islamic principles known as Shari'ah. Consequently, we operate our business in a manner consistent with Shari'ah principles and will continue to do so as long as Arcapita is a significant shareholder..
In particular, we must comply with Shari'ah principles regarding money that we borrow from other parties. For example, our lease financing arrangement, under which we have obtained financing to fund our operations and expand our business, is structured in a manner that complies with Shari'ah principles. The structure of this lease financing arrangement is described in the prospectus relating to our initial public offering. Also, a Shari'ah-compliant company is prohibited from dealing in the areas of alcohol, gambling, pornography, pork and pork-related products.
Note: majority of users who have posting privileges on MASH blog are not MASH members.
Comments are slightly moderated. MASH does not necessarily endorse every opinion posted on this blog.
by Daniel Atzori
worried and angry. Salman Ibrahim, CEO, and other officers vanished. They left Chicago - and probably the US - with about $80 million of investors' money. Most investors have been totally destroyed by the scandal, and now, finally, two months later, the "Illinois Secretary of State's office filed a temporary order of prohibition against the missing CEO and president of a shariah-compliant investment firm."
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