A voice of sanity crying out in the wilderness about Sharia Finance

Muslim investors are being hoodwinked.

Will they soon have their own 'sub-Sharia sukuk' mess on their hands?

Discouraging words are starting to be heard...

"...leading muslim scholar, Sheik Muhammed Taqi Usmani, says 80 percent of these bonds break the fundamentals laws of Islam. Tarek El Diwany, author of The Problem with Interest, says the sheik is right: The banks have been hoodwinking Muslim investors.

Tarek El Diwany: They are engaging in legal trickery in order to produce a fixed financial rate of return from the outset of the transaction. Many of them are -- not all of them.

Special boards of Muslims scholars certify all the sukuk as islamic. The trouble is, says El Diwany, the banks pay those scholars -- sometimes handsomely. Rather like an investment bank paying a rating agency, which then gives its conventional bonds a triple-A. Hardly an independent opinion...

Sheik Usmani's attack has sent shockwaves through the Islamic bond industry. His influential board has just issued tighter guidelines, and that has made many of the existing bonds look as if they don't comply with Islamic law.

Now, what has Dinah been telling you? Hasn't she been saying the exact same thing?

Sharia Finance bonus: Listen to the "Superman of Islamic Finance" pontificate on some show (tv? webcast? charade?) called the Salam Cafe. It appears to be something like the Australian-Muzzie version of the View. Now there's a concept.

At the 5 minute mark there's some sort of weird public service announcement and the declaration that a big rumble in the tummy means its Ramadan (editor's note: either that or you're a suicide bomber)

Superman is at the 9 minute mark... Listen to it (if you can)and tell me what you think...

I vote hoodwinker.
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