Posted on 08/17/2009 4:14:27 PM PDT by LSUfan
Earlier today, we posted a link to an article which mentioned that Kuwait Islamic Bank had entered into a joint venture with Colorado-based real estate company UDR.
We were curious as to what, if any, restrictions were to be imposed on the real estate properties in which Kuwait Islamic Bank invested here in the United States, so we made an inquiry via UDR’s “contact us” form on the company’s web site.
The company was quick to reply as, within minutes, we received a phone call from Dave Messenger, CFO of UDR.
I asked Mr. Messenger two questions:
(Excerpt) Read more at shariahfinancewatch.org ...
linky no workie..
I mis-spoke..
Whoah, a Georgia fan and LSU fan in the same thread without arguing.
Site seems slow.
broken
link in URL numbers, if you can. Thanks
I got nothing but respect for the Dawg nation. I especially want them to destroy the Gayturds every year.
That we agree on.
as long as the LSU fan admits their team is inferior, there will be no problems...:)
People are free to invest or not invest according to their preference.
Site seems to be giving trouble. It works off and on:
Last year we were for sure...gonna be tough to beat you all between the hedges this year...
I’m with you there..every year I want us to destroy them, and if not us, then you guys, or tennessee, or vanderbilt..he*l, I don’t care who beats them but it’s a great day when someone does..
Is Galen Hall still available to coach them?
How about summarizing 2-5 key points.
Can’t get to the site successfully after many repeated tries.
Not under Shariah they aren’t.
~~And this is acceptable under our laws ? ... PING!
Here ya go:
I asked Mr. Messenger two questions:
1. What, if any, special restrictions or qualifications relating to Shariah were required in the deal with Kuwait Islamic Bank?
2. Are zakat payments to be made as part of this venture?
Mr. Messenger did not attempt to address question number 2, but referred me to Kuwait Finance House to get an answer to that question.
Mr. Messenger was also quite insistent that UDR’s agreement was in fact with Kuwait Finance House and not with Kuwait Islamic Bank. We regard this as a distinction without a difference, since Kuwait Finance House is an arm of Kuwait Islamic Bank. In all the media being devoted to this new deal, the entity identified is in fact Kuwait Islamic Bank.
Mr. Messenger was able to provide much more information in response to question number 1.
His answer was troubling, right from the outset.
First of all, he mispronounced “shariah.” Shariah is pronounced shu-ree-uh. Messenger pronounced it shu-rye-uh.
It does not inspire a great deal of confidence in terms of due diligence when the CFO of the American entity which entered into the agreement with an Islamic bank cannot even correctly pronounce the name of the underlying doctrine which governs their joint venture partner.
Messenger was not bashful at all about the issue of shariah-compliance.
He declared that the entire agreement was written to be shariah-compliant to make sure that the joint venture properties fit in with their partners’ religion.
When asked about specific provisions which he knew about to establish and maintain shariah compliance, Messenger named two: “cinematography and food served on the property.”
I asked what he meant by cinematography and he explained that some of their properties include movie theaters.
Evidently, Kuwait Finance House/Kuwait Islamic Bank wants to make sure that no offensive movies are shown on properties in which they invest.
In terms of “food served on property” Messenger explained that no pork would be served on the property at functions put on by UDR.
I asked him if any of the properties leased to sandwich shops or delis or such. He said that 8 of their 160 properties did have such tenants.
Again, evidently, those businesses would be prohibited from serving pork to prevent any conflict with shariah or the religion of UDR’s venture partners.
Messenger explained that potential conflicts with shariah were addressed up front with the JV partners and would continue to be addressed up front to prevent conflicts.
What has clearly happened here is that Kuwait Islamic Bank has been able to impose shariah here in the United States by using its financial leverage over UDR.
This is the essence of Shariah-Compliant Finance.
THANKS TONS.
Soberingly, chillingly fascinating.
I am a lawyer and took a seminar not too long ago about Islamic finance. I don’t see Islamic finance as very threatening. It’s more a joke than a threat. First you might think that this a system of finance that was invented by Muhammed in the 7th century. Actually it was invented in the 1990s. The people who did it were primarily trying to distinguish themselves from nonmuslims. They started with two basic principles which hey supposedly got from the Koran. The first was a ban on interest and an aversion of risk. Instead of paying interest they structure every transaction as a sale rather than a loan. If you’re buying a house then the sellr sells it to the bank for say $100,000 and the bank sells it to you over time for $150,000. The bank gets the $50,000 margin instead of interest.
The really funny thing about it though is that its really more of a racket than a useful system because every single transaction no matter how small must be examined and approved as Sharia compliant by a commission of clergymen who charge a fee for the service. When I heard that I jst laughed hysterically.
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