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The Dubai Court of Appeal maintained a lower court’s verdict sentencing four businessmen and two former bank executives to ten-year imprisonment and payment of Dh1.8 billion in fine jointly for swindling Dubai Islamic Bank.
The appellate court panel, presided by Judge Moustapha Shinawi, supported all aspects of the primary conviction of the defendants in the Dh1.8 billion fraud case (more than $500 million).
The verdict could be appealed at the Court of Cassation in term of 30 days.
According to the prosecution records, three other defendants succeeded to defraud the DIB of more than $500 million.

Barwa Bank’s launched capital will rise to QR3bn from QR1.9bn following shareholder authorization for a rights issue.
Sheikh Mohamed bin Hamad bin Jassim al-Thani explained that the additional capital comes from the fact that they want to demonstrate a high level of financial strength, both in their domestic market and abroad. He added that additional capital allows us to supply for the needs of Qatar’s largest companies, that being an important consideration as they move onto the development and construction programmes outlined in Qatar National Vision 2030.

Global leaders point way to economic recovery at UN summit

Gordon Brown, Mary Robinson and global CEOs call for sustainable financial sector reform

Washington D.C., 20 October 2011 – With economic recovery topping the United States and global political agenda, a group of CEOs, major investors and bankers together with former United Kingdom Prime Minister Gordon Brown and President of Ireland Mary Robinson called for a far-reaching reform of the global financial system at a summit which ended in Washington D.C. today.

Amid a growing wave of protests highlighting economic concerns in countries from the US to the UK, Japan and Greece, more than 500 senior finance executives and policy-makers from around the world met at the United Nations Environment Programme Finance Initiative Global Roundtable (UNEP FI) summit to find sustainable solutions to tackle the drivers of market volatility and address the deepening rift between the rich and the poor.

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Albaraka Banking Group BSC (ABG) has purchased 60 percent of the issued shares of Al-Tawfeek Financial Group through its subsidiary in Bahrain, Al-Baraka Islamic Bank.
Adnan Ahmed Yousif, president and chief executive of ABG, stated that the procedures for consummating the acquisition are currently being finalized. He added that this acquisition endorses our strong commitment to the region despite the economic and political developments regionally and globally, which clearly prooves our financial soundness and successful strategy.

Gulf Finance House revealed its third quarter financial results for 2011.
The Bank recorded a net profit of US$ 4.1million for the first nine months of 2011, as compared to a net loss of US$ 162.2 million for the same period in 2010.
During the first nine months of the year, GFH raised its earnings by 279 per cent to US$50.02 million, compared to US$ 13.1 million during the same period last year. The reason fot this increase was mainly attributable to income from asset sales and settlement of liabilities.

Rasheed Al-Mi’raj, the Central Bank of Bahrain’s (CBB’s) governor, stated that Islamic financial institutions should learn from the experience of conventional banking institutions from the international financial crunch, increase understanding, monitor and even control, risks of liquidity, and warned them against the repercussions of succumbing to the same conventional financial mismanagement of short-term financial markets instrument.
At the 3rd Islamic Finance and Banking Conference for the Accountancy and Auditing Authority for Islamic Financial Institutions (AAOIFI) the main subjects were: enforcement of IFRS standards in Islamic banking, the need for continuity of Sharia control boards in the financial institutions, the extent of the success of REIT in Islamic banking, restructuring and performance, and the extent of success of using Islamic banking in financing international business operations (for products and instruments), the challenges and difficulties of enforcing of Basel-3 standards in Islamic financial institutions, and the apportionment of excess to shareholders in Takaful companies.

Key to the growth of the housing sector in the Gulf Cooperation Council (GCC) countries is the development of mortgage finance. Because of the demography of the region where some 65 per cent of the population is under 30 years old, demand for affordable housing is expected to raise significantly.
As many GCC countries depend mostly on expatriate population that consist of Muslims and non-Muslims their preference toward Islamic finance is mixed for several reasons. Until 2008, in the pre-crisis period, Islamic financial institutions were preferred to focus on real estate as an asset class and this drove to increased number of players that were offering a variety of Islamic mortgage products.

Despite the existence of Shariah advisory councils, Islamic banks and financial institutions in Malaysia may be failing to carry out their duties. An article in this month’s JSSH investigates transactions on purchasing houses specifically on transactions involving houses pending completion using the current practice of ‘sale by deferred payment’ also known as Bay’ Bithaman al-Ajil (BBA).

Islamic banking gained foothold in Malaysia, with the establishment of Bank Islam Malaysia Berhad in 1983 and facilities have since expanded. Products include Wadiah - where the bank acts as the safe-keeper of deposits but may provide returns to the depositors as a gift; Murabahah, or partnership and equity financing; Ijarah – leasing; Musharakah – partnership and Bay’ Bithaman al-Ajil – sale by deferred payment. Nuarrual Hilal Md. Dahlan and Sharifah Zubaidah Syed Abdul Kader Aljunid looked at sale and purchase and loan agreement to see if they comply with the requirements of the Islamic Law in protecting stakeholders and to provide practical suggestions to improve the existing practice.

Klaus Schwab, executive chairman and founder of the World Economic Forum (WEF), has the strong oppinion that it is time for the Middle East to grasp a more holistic, inclusive and qualitative approach to economic development. He stated that the events in this region over the past 10 months have no precedent and have developed a new regional order that is still evolving.

He also reminded that the next World Economic Forum on Europe, the Middle East, North Africa and Central Asia will take place in Istanbul, Turkey, in June 2012.

Luc Frieden, Luxembourg's Minister of Finance, has underlined the fact that given that financial institutions under Europe have remained stable against the backdrop of the eurozone debt crisis, it can learn and win from Islamic finance.
He added that Asia and Europe must join forces for the development and prosperity of the global economy.

The AAOIFI - World Bank Annual Conference on Islamic Banking and Finance will be co-hosted by AAOIFI and the World Bank. The conference will take place on 23 and 24 October 2011 in Bahrain Conference Centre, Manama, Kingdom of Bahrain.
At the conference the main subjects will be: pertinent topics for the international Islamic finance industry including inevitability of existence of Shari'a Supervisory Board in Islamic financial institutions, challenges in applying conventional international accounting standards, challenges in implementing Basel III capital adequacy standard, distribution of Islamic insurance surplus, potential of Islamic finance to promote international trade, and potential of real estate investment trusts in Islamic finance.

It seems that HSBC Amanah anticipates a pipeline of 30 new Islamic funds to raise its assets under management for serviced funds to $10 billion.
Germain Birgen, global head of securities services, stated that the bank currently services 90 Islamic funds worth roughly $5 billion in assets. He added that 30 new funds are forseen to be launched within the next 12 to 18 months.
He underlined the fact that there is also an increasing trend in the industry for Islamic fund managers in traditional Muslim markets to start international domiciled funds in Singapore and Luxembourg, to take advantage of better financial regulations and draw more conventional investors.

KSB Capital Group is searching investors in an open-ended Shariah-compliant investment fund targeting shares listed on the Qatari bourse.
Qatar is a promising market for investment as 90% of the companies listed there are paying out dividends to their shareholders. The statement came from Ibrahim al-Olwan, the company’s deputy chief executive.

It is possible that the Commonwealth of Independent States will become the next frontier for Islamic finance. At this point, six Muslim republics of the former Soviet Union, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kirgizstan and Tajikistan are members of the CIS. Moreover, Russia has also 20m indigenous Muslims in Russia, mostly concentrated in the semi-autonomous Caucasus provinces of Chechnya, Ingushetia, Dagestan, Tatarstan and Bashkortostan.
Although the relationship between Russia and its Muslims wasn't very good, it has started to make concerted efforts to reach out to Turkey, Iran and the Arab nations to the south and Pakistan, Malaysia and the Islamic democracies of South East Asia.

It seems that Malaysia's central bank is thinking about allowing a more flexible cap on foreign shareholdings in banks.
An unnamed source stated that Bank Negara Malaysia has been in talks with the country's financial services industry, to supply feedback for the government in drawing up its second 10-year Financial Sector Master Plan blueprint expected to be disclosed by the end of the year.

Standard & Poor's Ratings Services stated that Asia's solid economic growth and surging population will urge for significant developments and upgrades of its infrastructure.
It appears that Asian economies need US$8 trillion over the next decade to fully address the region's basic infrastructure needs, including developments in areas such as water, transportation, and energy.

Bank Alkhair is looking for small boutique banks in Malaysia to acquire, so that it can expand its presence in south east Asia and to win ringgit exposure.
The bank operates in Saudi Arabia, Malaysia and Turkey, primarily in the Islamic investment banking field.
Ikbal Daredia, CEO of its Malaysian operation, stated that Alkhair has put a target on some small institutions as takeovers, but underlined that nothing was going in the near future.

Dubai Bank was saved by Emirates NBD under instructions from Sheikh Mohammed Bin Rashid Al Maktoum, Dubai’s ruler. Dubai Bank is owned by the government, which also has a 55% stake in Emirates NBD.
Rick Pudner, CEO of ENBD, stated that Dubai Bank will be capitalized by ENBD to the extent considered necessary.

Kuveyt Türk Participation Bank has assigned HSBC, Kuwait’s Liquidity Management House and Standard Chartered Bank to arrange a series of fixed income investor meetings.