Really surprising because, if nothing else, Islam is so well known for its "transparency".
Posted on 05/14/2009 11:27:55 PM PDT by bruinbirdman
Restructuring experts are entering unchartered waters in the Persian Gulf.
Kuwait’s Investment Dar, the Islamic finance holding company which owns a majority stake in British luxury carmaker Aston Martin, has suspended payments on its KD1bn ($3.5bn) debt. Its strategy of relying on short-term financing was crippled by the credit crunch. Sharia law provides no precedent for what happens next.
Islamic finance is a recent phenomenon. The aim was to create products that work exactly like Western debt instruments, but without actually making “interest payments”, which is prohibited under some interpretations of sharia law. So, broadly speaking, the lender is called an investor and interest payments are renamed profits. The new terminology hasn’t had any practical effect up to now, as there haven’t been any major Islamic finance defaults.
Dar looks like a good test. The shares have fallen over 90pc in the last year on the chaotic Kuwait bourse and are currently suspended. At last count it had a $250m market capitalisation and assets that were valued at $4.9bn at the end of September. Dar has delayed publishing its fourth quarter results which are expected to resemble those of Kuwaiti rival Global Investment – a swing to a loss coupled with impairment charges.
Kuwait's weak disclosure rules mean that outsiders can’t get a clear view of the total debt structure. Dar has two listed sukuks, or Islamic bonds. The remaining debt is comprised of various Islamic instruments. There are over 100 separate creditors; local, regional and international. Dar considers all debt to be ranked equally, although some creditors are understood to disagree.
Credit Suisse has presented a restructuring plan that is understood to include some disposals – not Aston – and full repayment of the debt over a longer time frame. Creditors appear to be in a weak negotiating position.
(Excerpt) Read more at telegraph.co.uk ...
Sharia law provides no precedent for what happens next. ...
Perhaps a beheading?
They all just gather around and have a good laugh, those silly muslim laws and all. /sarc
islam: the religion of choice if you’re too stupid for scientology.
LOL!! priceless.
What else could it be? LOL.
Really surprising because, if nothing else, Islam is so well known for its "transparency".
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