IslamicFinance.de

Global standards are likely to become more explicit and a shift to centralised regulation may accelerate after Dana Gas reached a conditional deal with creditors on its contested $700mn sukuk issue. Dana shook the industry last June, saying it would not redeem its sukuk on maturity. It proposed swapping them for new sukuk with lower profit rates. The original sukuk used a mudaraba structure, which Dana said had fallen into disuse. Investors have been worried by the prospect of other issuers avoiding redeeming their sukuk by saying conditions have changed. According to Akram Laldin, deputy chairman of the Malaysian central bank, the Dana saga had strengthened the case for setting up centralised bodies that could approve Islamic contracts and rule on disputes. The Dana case appears to mean the end of the old mudaraba sukuk structure, criticised as un-Islamic by some scholars due to features such as guarantees on principal and fixed returns.