IILM reshuffles Shariah board

Updated 23 July 2013

IILM reshuffles Shariah board

KUALA LUMPUR/SYDNEY: The Malaysia-based International Islamic Liquidity Management Corp. (IILM) has reshuffled its Shariah board, losing four of its original six members including senior Saudi and Qatari scholars, according to the body's website.
The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was founded in October 2010 to help develop cross-border markets in Islamic financial instruments.
But it has been troubled by internal management upheaval — it changed its chief executive late last year — and the surprise pullout in April this year of Saudi Arabia's central bank.
The changes to the Shariah board, which monitors the IILM's activities and instruments to ensure that they follow Islamic principles, could indicate further delays to the body's plan to begin issuing sukuk.
The IILM announced in April that it aimed to make an initial issue worth up to $500 million in the second quarter of this year but has not yet proceeded with the plan, and it has not given a new time frame for it.
The body did not issue a statement on the changes to its Shariah board, which were merely listed on the personnel section of its website. It did not respond to Reuters questions about the changes. According to a December 2010 press release, the Shariah board members were to serve three-year terms.


Two Saudi scholars are no longer listed as members of the IILM Shariah board, including Mohamed Ali Elgari, a prominent expert who sits on over 80 Shariah boards around the world. Elgari's office did not respond to Reuters questions.
Ahmed Ali Abdalla Hamad is the other Saudi scholar no longer listed; he serves as vice-chairman on the Shariah board of Saudi Arabia's Al Rajhi Bank, the world's largest Islamic bank by assets.
The departures also include Qatari-born Waleed Bin Hady Al Mullah, chairman of the Shariah boards of Qatar Islamic Bank and Masraf Al Rayan, two of the Gulf Arab state's largest Islamic lenders.
Of the original members of the IILM's Shariah board, formed in 2010, only two scholars from Nigeria and Malaysia remain. They have now been joined by scholars from Indonesia and Kuwait; currently the board consists of four members.
It is unclear exactly when the reshuffle occurred, but Indonesian scholar Cecep Hakim's profile on LinkedIn, an online service for business networking, shows he left the Shariah board in April this year, roughly coinciding with Saudi Arabia's exit from the IILM.
The IILM's internal Shariah coordinator, Edib Smolo from Bosnia, left the body in March this year, according to his LinkedIn profile. He declined to comment. The Shariah coordinator does not sit on the Shariah board but works with it to design and structure transactions, do research and perform other tasks.
The planned sukuk issue by the IILM would be part of a program that could eventually expand to $3 billion, and would be a major step in developing Islamic finance globally; it aims to address a shortage of liquid, investment-grade instruments which Islamic banks can trade across borders.
The IILM has not explained why it has taken so long since 2010 to develop the sukuk program. People familiar with the body have said it has encountered complex issues involving regulation in various jurisdictions and the choice of assets to back the sukuk.
Current shareholders in the IILM are the central banks and monetary agencies of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey and the United Arab Emirates, as well as the IDB, according to its website.


A sham Qatar deal could have cost ex Barclays exec $64m, court hears

Updated 46 min 1 sec ago

A sham Qatar deal could have cost ex Barclays exec $64m, court hears

  • Roger Jenkins stood to get “good leaver” package -lawyer
  • Defense lawyers tell jury SFO case is misconceived, perverse

LONDON: A former top Barclays executive, on trial in London on fraud charges, would have risked a £50 million ($64 million) “good leaver” package if he had sought a criminal deal with Qatar during the credit crisis, a court heard on Thursday.
It would have been “lunacy” for Roger Jenkins, one of three men charged with fraud over undisclosed payments to Qatar during emergency fundraisings in 2008, to risk such accrued benefits and a job that had paid him 38 million pounds in 2007 alone, his lawyer told a jury at the Old Bailey criminal court.
The high-profile Serious Fraud Office (SFO) case revolves around how Barclays — one of the few major British banks to survive the credit crisis without direct government aid — raised more than 11 billion pounds ($14 billion) from Qatar and other investors to avert a state bailout as markets roiled.
Prosecutors allege that former top executives lied to the market and other investors by not properly disclosing 322 million pounds paid to Qatar, disguised as “bogus” advisory services agreements (ASAs), in return for around four billion pounds in two fundraisings over 2008.
Jenkins, the former head of the bank’s Middle East business, Tom Kalaris, who ran the wealth division and Richard Boath, a former head of European financial institutions, deny charges of conspiracy to commit fraud by false representation and fraud by false representation.
Lawyers for Jenkins and Kalaris told the jury the case against their clients was misconceived, perverse and illogical and that there was no evidence the ASAs were a sham or fake.
In brief opening speeches before the prosecution continues laying out its case, they alleged the defendants believed the ASAs were genuine agreements to secure lucrative business for Barclays in the Middle East — a region it was keen to exploit.
They said the agreements were side deals during emergency fundraising that June and October that had been approved by internal and external lawyers and cleared by the board.
“The unequivocal, repeated advice was that this was legitimate — providing the ASA was a genuine contract for the provision of benefits to Barclays,” said John Kelsey-Fry, a senior lawyer representing Jenkins.
Jenkins, who will give evidence later, had pursued and won the trust of Sheikh Hamad bin Jassim bin Jabr Al-Thani, the former prime minister of Qatar, and wanted to unseat Credit Suisse as the wealthy, gas-rich Gulf state’s preferred bankers, the jury heard.
Had Jenkins considered a fraudulent deal with Sheikh Hamad, the sheikh might have rung up Barclays bosses and said: “Neither I nor QIA (the sovereign wealth fund) are putting a penny in a bank like yours. I will never do business with you again,” Kelsey-Fry said.
Qatar Holding, part of QIA, invested in Barclays alongside Challenger, Sheikh Hamad’s investment vehicle.
The case against Kalaris, meanwhile, hung on three conversations he had had with Boath on the afternoon of June 11, 2008, that the prosecution had “fundamentally misunderstood,” his lawyer Ian Winter said.
When Kalaris told Boath: “Noone wants to go to jail here” and that lawyers would provide “air cover,” he was trying to ensure that a genuine ASA would be approved by legal experts as a legitimate means of paying Qatar for real value, Winter said.
All three men, aged between 60 and 64, are charged over the June fundraising. Jenkins, alone, also faces charges over the October fundraising.
The trial is scheduled to last around five months.