Dr. Ahcene Lahsasna & Lee Sze Lin
The purpose of this paper is to ascertain the prevailing Shariah issues in Islamic capital markets, particularly Sukuk. Common features of conventional bonds are replicated in Sukuk via late payment penalty upon default, trading of debt based Sukuk, purchase undertaking in equity based structures and ownership status in asset based transactions. These features posed Shariah concerns and are discussed in the paper from the perspective of current practices and views of scholars by compiling various references that reveals the unique diversity of Shariah. The four issues covered are not exhaustive and more are expected to creep up as Sukuk structures continue to mimic conventional bonds. The paper provides value by shedding light the named issues and also highlights the need for a balance between growing the Sukuk market and upholding Shariah in all aspects when structuring Sukuk.
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