Dana debacle highlights need for unified Islamic finance regulator

A recent report from Standard & Poor’s said that Islamic financial assets had accelerated toward the end of 2016, but that such progress was unsustainable in the long term. The agency pointed out too that a lack of standardization was a barrier to creating a truly global industry based in the Middle East. The Islamic economy would continue to grow but at much lower rates than in the boom years from 2007 onward. It is against this background that recent events at Dana Gas should be seen. In 2013, the company issued sukuk totaling $700 million. Dana, which does a lot of its business in Egypt and Iraq, had problems getting paid in those countries. Earlier this month, Dana said it had received new legal advice which meant its sukuk were no longer to be considered Shariah-compliant. The Dana debacle confirms the belief that what is really needed is a much more standardized regulatory approach in the Islamic finance market.