He has successfully persuaded the court in Kuwait to give his debt-restructuring plan a chance to the chagrin of a few of TID’s creditors.

He has sought Chapter 11 protection under the emirate’s Financial Stability Law (FSL), which provides the necessary legal framework under which TID can implement a court-approved restructuring plan in which full repayment of all of its banks and investors is incorporated.

After initial hiccups and a year-long battle over whether TID indeed was eligible to be included under the FSL, Al-Musallam and his lawyers once gain pulled it off on June 2, 2011, when the Islamic investment company was indeed admitted under the FSL following the approval of the restructuring plan, which was submitted by the company to Kuwait’s Special Circuit Court of Appeal on May 5, 2011.

In a statement, a relieved Al-Musallam reiterated that “this has been a challenging process for everybody involved and we hope to draw a line under the past and move forward and back into business for the good of all stakeholders as well as Kuwait itself. I would like to take this opportunity to thank TID’s banks and investors for their patience and support as well as to extend my sincere gratitude to the Kuwaiti judiciary and regulatory authorities.”

The company, its advisers and both coordinating committees, he added, worked tirelessly over the last two years to find a solution to what has been a complex process in which TID has had to overcome a great many obstacles.

“We are now in a position to begin the implementation of a restructuring plan under which all TID banks and investors will receive full repayment and which provides the best possible outcome for all of TID stakeholders. We look forward to continuing to work closely with all relevant parties to ensure the effective and efficient implementation of the agreed plan. TID maintains a strong asset base from which to service its obligations and has solid future commercial prospects,” he maintained.

While the resilience and doggedness of Al-Musallam has to be commended, a restructured TID can never be the same as before.

Any failure of TID, then one of the largest of Kuwait’s many Islamic investment and finance companies, would have been a body blow to the Islamic finance industry in Kuwait per se and to the wider global movement in general.

Of course, TID was not the only Kuwaiti investment company that experienced difficulties in the aftermath of the global financial crisis, which precipitated inter alia a local real estate investment bubble to which many of these companies had an over-weighted exposure. There were several other firms — both Islamic and conventional -including the International Investment Group and Global Investment House that suffered.

Kuwait has some 105 investment firms, many of which were hard hit during the financial crisis.

TID and for that matter the other such companies will never be the same again for two simple reasons.

Kuwait very belatedly established its own Capital Market Authority (CMA) following the publication of its bylaws in the official gazette, Al-Kuwait Al-Youm on March 13, 2011.

No sooner it started operations than it gave the Kuwait Stock Exchange (KSE), brokerage companies and investment firms up to a year to comply with new regulations relating to ownership, capital increases, acquisitions, share offerings, disclosure and compliance.

The task is huge given that Kuwaiti investment companies have hitherto allegedly been serial violators of Central Bank of Kuwait regulations, which speaks more about the poor enforcement culture of the Kuwait regulator and the politics of financial legislation and regulation in a country that is beset by constant ideological bickering between the government, certain Opposition factions in the National Assembly, and the private office of the Emir. In the Islamic finance space, this process saw to it that it took over three years for Kuwait to adopt a stand alone Islamic banking law, while a draft sukuk law is still festering in this morass of a political process waiting to be adopted.

Indeed, many of the investment companies and banks were bitterly critical of the slow response of the Kuwaiti government and the Central Bank of Kuwait (which to be fair to the regulator can only respond if it gets the go-ahead from its political masters at the Ministry of Finance) in helping the above institutions deal with the impact of the credit crunch and the financial crisis.

The establishment of the CMA does not mean that the investment company market is going to dramatically change overnight. What is does do, is to separate financial institutions that take deposits and conduct lending and financing activities; from those that conduct investments - a sort of Kuwait version of the Glass-Steagalls Act.

This may see a wholesale re-licensing of the entire stock of Kuwaiti investment firms, a process that is well underway. It will also take time to eliminate regulatory overlap between the Central Bank of Kuwait and the CMA.

While the above changes also applies to The Investment Dar (TID), its pre-occupation over the next few years will be to successfully implement its restructuring.

TID met with its banks and investors in Dubai on June 14, 2011, when it confirmed that the implementation of its court-approved 5-year Restructuring Plan would commence on June 30, 2011.

In a statement, TID confirmed that some KD82 million (about $300 million) would be paid out in the first year, which will go to individual investors and small non-financial institutions. In the second, third, fourth and fifth years there will be fixed payments to the remainder of the banks and investors, followed by a final payment before June 30, 2017, which will make up the balance owed to this group plus an amount equating to an annual profit over the 8.5 year period.”

To partly finance this, TID may liquidate some $1.7 billion of assets over the next three years.

Going forward, the company will be bound by the provisions of the court judgment on the Restructuring Plan which include a motley of commercial restrictions which is aimed at ensuring that “TID’s business activity is centered on maximizing the value of its assets, meeting the repayment schedule given in the plan and maintaining value for TID’s shareholders in the longer term.”

The commercial restrictions include a freeze on dividends to shareholders, on new TID investments and on taking on any new indebtedness.

The plan also undertakes to separate the roles of the chairman and CEO within the company, which hitherto has been held by Al-Musallam, one of the pioneers of Islamic banking in Kuwait who learned his trade at the nascent Kuwait Finance House.

In accordance with the articles of the FSL, a Central Bank Monitor will review progress with full access to personnel and financial information.

TID is also setting up a new coordinating committee of the banks and investors to liaise with the company at regular face-to-face meetings, establishing regular reporting processes.