Band Of Brothers

A non-academic investigation into the networks that control Islamic financial institutions

Shari’a scholars are too damn powerful, “We must make Shari’a scholars more accountable,” “Islamic banking industry is hostage to a small group of Shari’a scholars” …

These are echoes of conversations many of those who are involved in Islamic banking and finance (IBF) must have heard at various conferences, seminars and discussion groups.

In fact, once there was a serious attempt (hopefully unintended!) By a small consultancy company to destroy credibility of Shari’a scholars. The so-called “social network” approach adopted therein certainly managed to dint the credibility of Shari’a scholars and in fact brought a lot of genuine issues to the forefront of the policy debate. But… the question remains. Who controls IBF? For the disappointment of many (the likes of http:// www.shari’ahfinancewatch.org), “Who Controls IBF” is not a who’s who of the people on the sanction lists drawn up by America and the EU. It is also not a guide to the so-called Islamic caliphate that seems to be emerging in parts of Iraq, Syria and the neighbourhood.

IBF has in fact emerged as an Islamic capitalistic movement, which fits well in the Western capitalism. This is one of the reasons that it failed to earn patronage of the likes of Hafiz Al Asad (father of the current President Bashar

Al Asad of Syria), Muammar Qaddafi, Saddam Hussain and other leaders in the Muslim world, with inclination towards socialism. Interestingly enough, IBF initially failed to get traction from many other governments in the Muslim world. It was only after some heavyweight Western financial institutions showed their trust in IBF that some governments in the Muslim world started accommodating IBF in their regulatory regimes.

If it is not Al-Qaeda or its remnants who are controlling IBF, who is it that is behind the global movement of IBF? Is it Shari’a scholars who control IBF or the centre of power lies somewhere else? Is it actually a legitimate question to ask after all?

If ulama’, or Shari’a scholars, are not central to IBF, then who else? Is it the Saudi royal family? Are these the ruling families in UAE and other countries in the Gulf Cooperation Council (GCC) area, which are controlling Islamic financial institutions? Are there some other invisible hands behind the growing global Islamic financial services industry?

Is there a dotted line between Islamic financial institutions and global terrorist networks? Where are most of the assets under management of Islamic financial services located? To understand all these issues, it is important to look into a number of phenomena, mechanisms and processes:

1. Shareholding composition of some of the largest Islamic banks in the world;
2. Regulatory bodies for Islamic financial

institutions;

• Affiliations of the Shari’a scholars involved

in IBF;

• Attitudes of terrorist groups towards IBF; and
• Involvement of non-Muslims in IBF.

WHO OWNS ISLAMIC BANKS?

There are three categories of owners of Islamic banks:

1. Governments;
2. High Net Worth Individuals (HNWIs) and families; and
3. General public.
4. Governments

There have been a few governments in the Muslim world, which are friendly towards IBF.

Malaysia is an exception where the government has taken an unambiguously strong and favourable approach towards the development of IBF. Almost all other governments in the Muslim world are at best indifferent to IBF and in some cases hostile towards its development. Admittedly, there are countries that have started showing interest in the development of IBF, and the newly elected government in Pakistan is one of them. It must, however, be emphasised that there is nothing sinister about this changing attitude of the governments in the Muslim world towards IBF. Similarly, it is only recent that the government in Turkey has started realising that IBF provides a great opportunity for it to attract Islamic capital from other parts of the Muslim world.

Arguably the strongest opponents of IBF in the Muslim world, the likes of the regimes of Muammar Qaddafi, Saddam Hussain and Hosni Mubarak, are no more relevant, but still there exists strong resistance to the introduction of IBF in most of the countries included in the Organisation of Islamic Cooperation (OIC). The opposition has largely come from the authoritarian regimes and, in case of democratic countries, from the bureaucracy.

Two notable countries where government-level support exists for IBF are Iran and Sudan. Both countries are isolated from the global Islamic financial services industry primarily because of the on-going economic sanctions by USA and other allied countries.

Iranian banks account for about 40 per cent of total assets of the world’s top 100 Islamic banks. Bank Melli Iran, with assets of $45.5 billion came first, followed by Saudi Arabia’s Al Rajhi Bank, Bank Mellat with $39.7 billion and Bank Saderat Iran with $39.3 billion.

Iran holds the world’s largest level of Islamic finance assets valued at US$489 billion, which is US$150 billion more than the next country in the list, i.e., Saudi Arabia. Six out of ten top Islamic banks in the world are Iranian.

It is also worth mentioning that Bangladesh is perhaps the most under-rated country in the world, although it has over 20% market share for its Islamic banks – double of the comparable figure for Pakistan, which has been one of the most talked about and most frequently cited country in the global Islamic financial services industry. Although industry observers and analysts refer to Al Rajhi Bank as the largest Islamic bank in the world (excluding Iran), Islami Bank Bangladesh has escaped attention. With nearly 300 branches and about 12,000 strong staff, it has the largest Islamic banking network in Southeast Asia.

It is also worth mentioning that Bangladesh is perhaps the most under-rated country in the world, although it has over 20% market share for its Islamic banks – double of the comparable figure for Pakistan, which has beenone of the most talked about and most frequently cited country in the global Islamic financial services industry. Although industry observers and analysts refer to Al Rajhi Bank as the largest Islamic bank in the world (excluding Iran), Islami Bank Bangladesh has escaped attention. With nearly 300 branches and about 12,000 strong staff, it has the largest Islamic banking network in Southeast Asia.

Why government support has not been forthcoming for IBF?

Although a number of factors may have contributed to the lack of support for IBF by Muslim governments in the past, it is however currently by and large a bureaucratic problem. It is no more seen as a political threat, which was erroneously the case in the past. Introduction of IBF requires substantial changes in legal frameworks, taxation laws, banking and financial regulation, and property rights. The bureaucracy in these countries finds it a daunting task, and hence is unwilling to change the status quo.

If someone has to pick up five governments supporting IBF, weighted by their global significance, the following list will emerge:

1. Malaysia
2. United Arab Emirates
3. Bahrain
4. Kuwait
5. Qatar

Interestingly, all these five countries are very small in terms of population. Their significance and influence in the politics of the Muslim world is rather limited as well. None of the above countries has a population more than 30 million. While Malaysia has the highest population in the above group, it is notable that the Muslim population therein is only about 60% of the total population in the country. The governments of the countries with the largest Muslim populations are at best indifferent if not hostile to IBF. Indonesia, for example, is a secular country constitutionally; its government finds it difficult to patronise IBF officially. In the recent past, changes in certain laws have allowed Indonesia to use sukuk as a capital market instrument to raise funds for the public sector. Pakistan, which is constitutionally an Islamic republic, has for long resisted demands for transforming its economy and financial sector in commensurate with the Islamic economic doctrine. Similarly, despite having captured the market share of about 20%, Bangladeshi Islamic banks are growing through a market-based approach rather than an explicit government support. The politics of IBF in Turkey (with secular constitution) remains complex, despite recent sympathetic approach by the government. Egypt, despite being the birthplace of modern IBF, has also been careful in its treatment of IBF.

Malaysia

Malaysian government is by far the most committed advocate of IBF in the world. It is primarily due to the successive Malaysian governments and the role of a catalyst of Bank Negara Malaysia that Malaysia enjoys a vibrant Islamic financial system. Some of the royal families in Malaysia have also been involved in IBF. The most obvious leadership role is being played by HRH Sultan Nazrin Shah of Perak (GIFA Laureate 2012) who serves as Financial Ambassador for Malaysia International Islamic Financial Centre (MIFC). The royal family of Negri Sembilan is also involved in IBF through its shareholding in the Bahrain-based Ithmaar Bank. The government of Malaysia has direct and indirect shareholding in a number of Islamic financial institutions. Two notable government investments are as follows:

Tabung Haji: Tabung Haji is the oldest example of success of an Islamic financial institution. Primarily a savings programme for those who intend to travel to Makkah for pilgrimage, Tabung Haji has emerged as an influential player in the Islamic financial services industry with significant shareholdings in Bank Islam and a number of other Islamic financial institutions.

Khazanah: Malaysian sovereign fund, Khazanah, has been instrumental in promoting IBF in the country as well as outside Malaysia. It has been instrumental in developing an Islamic capital market through its various roles in the issuance of sukuk in the country. It also has a significant shareholding in Fajr Capital, a Dubai- based Islamic private equity firm, which in turn has 40% shareholding in Bank Islam Brunei Darussalam.

Furthermore, through MIFC Bank Negara Malaysia and Securities Commission Malaysia are proactive in promoting and hence controlling the Islamic financial services industry.

Malaysia also hosts Islamic Financial Services Board – the global body set up to develop regulatory and prudential guidelines for the institutions offering Islamic financial services.

United Arab Emirates

Although the UAE government has not been involved in official advocacy of IBF, the governments and the ruling families in the country have invested heavily in Islamic banks and financial institutions. It is only recent that the government of Dubai has officially announced to make Dubai as a centre of excellence for the global Islamic economy.

Dubai holds the distinction of hosting the oldest Islamic commercial bank in the world, namely Dubai Islamic Bank. Abu Dhabi, the more dominating emirate in the federation has its own flagship Islamic bank, namely Abu Dhabi Islamic Bank (ADIB). In addition to these two Islamic banks, a number of other Islamic banks and financial institutions are operating in the UAE. Almost all these initiatives have royal patronage, although the Central Bank of the UAE does not seem to treat Islamic banks any different from their conventional counterparts. Hence, Islamic banks despite having shareholdings from the ruling families do not enjoy any preferential treatment. This is primarily due to the fact that most of the conventional banks are also either owned by the state governments or members of the ruling families.

Through these Islamic banks and financial institutions, governments in the federation of UAE play an influential role in the global Islamic financial services industry. For example, Dubai Islamic Bank now operates as an international conglomerate with its investments in Pakistan (Dubai Islamic Bank Pakistan), Jordan and Sudan, etc.

Similarly, ADIB has in recent years expanded into Egypt and UK. It has very aggressive plans to acquire assets around the world, especially in the MENA region. Al Hilal Bank, another bank owned by the government of Abu Dhabi, already has set up a bank in Kazakhstan and has potential to become a global leader in the Islamic financial services industry.

Bahrain

Bahrain government has for long used its financial sector strategy to promote and develop IBF in the country to attract foreign capital. With industry-building organisations like AAOIFI, IIFM, IICRA and LMC, Bahrain remains relevant to the global Islamic financial services industry, although some other players like Malaysia, UAE and now Qatar are gradually claiming the leadership turf from it.

Bahrain has also been influential in terms of its advocacy role in the global Islamic financial services industry. Long before any other country, it patronised World Islamic Banking Conference (WIBC), arguably the largest annual gathering of practitioners of IBF in the world. Through such initiatives, the government of Bahrain succeeded in integrating the economy of Bahrain with the other economies in the GCC region.

Kuwait

Kuwait has played a globally visible role in the Islamic financial services industry, spearheaded by Kuwait Finance House, which has direct presence in a number of countries, most notably in Bahrain (KFH-Bahrain), Turkey (Kuveyt Turk) and Malaysia (KFH-Malaysia).

Apart from Kuwait’s role in setting up Islamic banks, it has been involved in setting up other firms that are now offering their services to Islamic banks and financial institutions. Most notable of such an investment is in International Turnkey Systems (ITS), which is a global player in Islamic financial technology.

The government of Kuwait has brought IBF into the mainstream by allowing non-ruling families to freely set up Islamic banks and financial institutions and in some cases by directly investing in the industry. For example, the government of Kuwait holds almost half of shares in KFH – one of the oldest Islamic banks in the world – through Kuwait Investment Authority (24.08%), Public Authority for Minor Affairs (10.48%), Awqaf Public Foundation (8.29%) and Public Institution for Social Security (6.02%).

Through such institutions, the government of Kuwait attempts to influence developments in IBF in other major markets. A detailed analysis of such an influence and control is included in the forthcoming Global Islamic Finance Report 2015, to be released by Edbiz Consulting towards the end of the first quarter of the year.

Qatar

The government of Qatar has in the recent years has aggressively acquired Islamic financial assets around the world. Through Islamic financial institutions, it has made major investments in a number of countries, including Pakistan (e.g., Pak-Qatar Takaful), UK (e.g., Al Rayan Bank, UK), and a number of countries in the MENA region. All Islamic banks in the state of Qatar have direct or indirect patronage of the royal family. Qatar Islamic Bank, Qatar International Islamic Bank and Al Rayan Bank have their presence in multiple jurisdictions and are deemed as global players in the Islamic financial services industry.

1. HNWIs and Families

The following HNWIs and families are the movers and shakers of the global Islamic financial services industry:

1. Prince Mohammed Al Faisal
2. Sheikh Saleh Kamil
3. Sheikh Sulaiman Bin Abdulaziz Al Rajhi

Looking at the above list, one is inclined to conclude that Saudi Arabia holds key to the global Islamic financial services industry, as all the three individuals are in fact Saudis.

As mentioned earlier, however, IBF is much more than just being a Saudi phenomenon. A number of countries, and the HNW industrial families therein, own and control Islamic financial institutions. For example, Randeree family, a UK-based South African family holds shareholdings (albeit small) in Islamic financial institutions in UK, Pakistan, South Africa and the South East Asia. There are numerous other such families that are influential in the global Islamic financial services industry. In this article, we shall restrict our focus to the above three HNWIs.

Prince Mohammed Al Faisal

If someone has to trace a royal connection in the global Islamic financial services industry, the buck goes back to no other than the late King Faisal Bin Abdul Aziz Al Saud whose eldest son Prince Mohammed Bin Faisal Al Saud played a pioneering role in developing IBF as a pan-Islamic phenomenon.

In its first phase of development, IBF benefited from the support and patronage of the likes of Prince Mohamed Al Faisal, the founder of Dar Al Maal Al Islami (DMI) Trust – technically a trust but in effect a holding company. Founded in 1981, it has an extensive network stretching over four continents, with well-integrated regional subsidiaries enabling it to respond to local business needs and conditions. Based on this geographic structure, the DMI Group and associates act as a financial bridge between the world’s leading financial centres and Islamic countries.

The Group comprises three main business sectors: Islamic banking, Islamic investment and Islamic insurance.

Islamic banking is exercised in different forms: commercial and retail banking in the Gulf region and other parts of the world; fund management and financial services in Switzerland and Jersey.

Islamic investment companies are located in Bahrain, Egypt and Pakistan. There are also associated Islamic insurance companies based in Bahrain and Luxembourg, providing services to the Islamic communities in the Middle East and Europe.

The Board of Supervisors of DMI Trust directs and oversees the business of the Group.

DMI Administrative Services S.A., located in Geneva, Switzerland, provides assistance to the Board of Supervisors, in particular in the areas of legal and financial control, audit and risk management and information technology.

DMI Trust is an institution that creates, maintains and promotes Islamic financial institutions. Asset management is one of the Group’s core business activities. Primary success of the business lies in the strategy that it invests clients’ funds prudently along with the principal shareholders’ funds with the objective of earning secular returns, although the businesses and transactions are Shari’a compliant. Given the depth of its investors’ base, DMI has devised a comprehensive range of Islamic financial instruments to channel investors’ funds into viable Shari’a-compatible operations and investments.

Through DMI Trust, Prince Mohammed developed a network of Faisal Banks in different parts of the Islamic world, notably in Pakistan, Egypt and Sudan. After a lot of restructuring of the group and a series of mergers and acquisitions, Faisal Bank brand has lost its significance in the mainstream IBF, although the founding shareholders in the DMI Trust continues to hold stake in a number of Islamic banks, most notably Ithmaar Bank of Bahrain.

Although Prince Mohammed Al Faisal’s visibility in IBF has decreased following the restructuring of the DMI Trust, there is no doubt that his vision and strategic thinking remain central to the development of institutions owned by the DMI Trust. He is most widely revered in the Muslim world, and is treated with due respect in the Western world. Although after 9/11, there were attempts to tarnish his image, people like Richard A. Debs, an advisory director at Morgan Stanley and vice chairman of the United States-Saudi Arabian Business Council, thinks, “Prince Mohammed has been unfairly persecuted and attacked. I just don’t see the connection between Islamic finance and Islamic extremism.”

The new face of DMI Trust is Prince Amr Mohammed Al Faisal, a son of Prince Mohammed Al Faisal. DMI Trust continues to hold interests in 55 Islamic banks and financial institutions around the world, although Ithmaar Bank is now the new face of the businesses owned by it.

Based in Bahrain, Ithmaar Bank is now the flagship institution of DMI Trust, which holds interests in a number of banks and non-bank financial institutions in a number of countries. In February 2013, Ithmaar Bank merged with one of its Bahrain-based associates, First Leasing Bank, increasing its capital to US$758 million.

Sheikh Saleh Kamil

Another influential personality in IBF is Sheikh Saleh Kamil, founder and Chairman of Dallah Al Baraka Group that owns Al Baraka Banks in Bahrain, Pakistan, Bangladesh, with strong presence in other OIC countries Jordan, Tunisia, Sudan, Turkey, Egypt, Algeria, South Africa, Lebanon, Syria, Iraq, Saudi Arabia, Indonesia and Libya.

Interestingly, like his other peer, Prince Mohammed Al Faisal, Sheikh Saleh Kamel chose to operate outside his native Saudi Arabia. This was supposedly a deliberate pan- Islamic strategy to benefit from the vast market of the OIC comprising 56 countries.

Sheikh Sulaiman Bin Abdul Aziz Al Rajhi

The largest Islamic banks by size are arguably the Iranian state-owned banks. Outside Iran, Al Rajhi Bank is the largest Islamic bank in terms of assets under management and market capitalisation. The principal shareholders of the bank are Al Rajhi family, which is an influential industrialist family in the Kingdom of Saudi Arabia.

Although Sheikh Sulaiman Al Rajhi has now retired from all of his businesses after donating his personal wealth, Al Rajhi Holding continues to play a dominant role through several of his sons. Outside Saudi Arabia, the family owns Al Rajhi Bank in Malaysia, and a number of companies (industrial as well as financial) throughout the world.

• Regulatory Bodies

Although there are a number of regulatory bodies on a global level to bring discipline to IBF, but none can be considered as controlling the Islamic financial services industry. Most of the financial regulators treat Islamic banks and financial institutions on a par with conventional banks and financial institutions, with no separate regulatory framework for the former. Exceptions do exist, e.g., in Malaysia where separate laws and regulatory regimes exist for Islamic banks, takaful companies and Islamic capital market players. In other countries like Pakistan, Islamic banks, takaful companies and other Islamic financial institutions are regulated by State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan (SECP).

Nevertheless, there are five global bodies that attempt to influence practices of IBF in the world:

1. Accounting & Auditing Organisation of Islamic Financial Institutions (AAOIFI)
2. Islamic Financial Services Board (IFSB)
3. International Islamic Financial Market (IIFM)
4. General Council for Islamic Financial Institutions (also known as CIBAFI)
5. Islamic Research and Training Institute (IRTI)

D. Shari’a Scholars

Perhaps the most influential Shari’a scholar in the global Islamic financial services industry is Sheikh Muhammad Taqi Usmani, a Pakistani cleric who represents the dominant hanfi school of Islamic jurisprudence. There is no denial of the fact that Shari’a compliance remains central to IBF but it is important to underplay any sensationalisation of the power of fatwa. There is nothing sinister about the involvement of Shari’a scholars in IBF – they just happen to provide technical advice on Shari’a matters related with banking and finance.

In most of the countries where the role of Shari’a scholars is emphasised upon in IBF, it is restricted to the advisory services on Shari’a matters. Perhaps Malaysia is the only country where the banking regulator, BNM, is pushing for a role of Shari’a scholars in the corporate governance of Islamic financial institutions. There are a few Islamic banks in Malaysia, where Shari’a scholars sit on the boards of directors of the banks as well as being members of the Shari’a advisory committees. However, it is important to note that such scholars in Malaysia do not come from the pure madrasa backgrounds.

For example, the recently restructured Shari’a advisory committee of CIMB Islamic comprises of the following members:

1. Dr Mohamed Azim Mohamed Adil (Chairman and also an independent director of CIMB Islamic Bank)
2. Dr Mohammad Hashim Kamali
3. Sheikh Nedham Yaqoobi
4. Sheikh Dr Haji Mohd Nai’m Haji Mokhtar
5. Dr Shafaai Bin Musa
6. Dr Yousef Abdullah Al Shubaily
7. Dr Noor Inayah Yaakub
8. Sheikh Muhamad Taufik Ridlo
9. Professor Dato’ Dr Sudin Haron (also an independent director of CIMB Islamic Bank)

Out of the nine members of Shari’a Advisory Committee of CIMB Islamic, two are also independent members of the Board of Directors of the bank. This is a clear indication of the growing importance of Shari’a compliance in the Malaysian IBF. CIMB Islamic Bank’s Shari’a Advisory Committee is perhaps the largest such committee of an Islamic bank anywhere in the world. It comprises traditionally trained Shari’a scholars as well as those who attended contemporary universities, possessing either formal education in or practical experience of IBF and Shari’a.

Other Malaysian Islamic banks with overlapping membership of Shari’a Advisory Committee and Board of Directors are given in Table 1.

Not all Islamic banks in Malaysia have such overlapping memberships but it is a trend being followed by an increasing number of institutions. It is interesting to note that full-fledged standalone Islamic banks like Bank Islam, Bank Muamalat and Bank Rakyat have so far not opted for overlapping memberships, perhaps because such institutions already have a strong commitment to Shari’a assurance and that the senior management are already deemed fully committed to Islamic banking. The Islamic banking subsidiaries of conventional banks use overlapping memberships to indicate to the market that there is strong and full commitment at the shareholder’s level to upholding Shari’a principles.

Another interesting feature of appointment of Shari’a Advisory Committees at the bank level is that such committees are restructured very frequently to ensure that no individual Shari’a scholars are too strong and influential at the bank level. The influence of individual Shari’a scholars at the bank level is further diluted by the centralised Shari’a Advisory Council of Bank Negara Malaysia (BNM), which has the final word in matters related with Islamic banking and takaful in the country.

Each country has its own approach to Shari’a advisory. For example, Middle Eastern countries have right from the beginning opted for a market-based approach to Shari’a advisory, allowing individual Islamic banks and financial institutions to appoint their own Shari’a Advisory Committees. It is perhaps because of this allowance that individual Shari’a scholars are deemed more influential in the Middle East than in other parts of the world.

In Indonesia, Majelis Ulama is a body recognised by the central bank, Bank Indonesia, as a competent authority to issue fatwas and Shari’a rulings on Islamic financial matters. However, Majelis Ulama retains its independence from the central bank or any other government departments to ensure Shari’a authenticity.

Table 2 lists top 10 Shari’a scholars who have great influence in Shari’a matters related with banking and finance.

IBF AND TERRORISM

After an analysis of influence of mainstream institutions, families and individuals in IBF, a brief note on its possible link with terrorism is essential to wrap up the discussion.

Following the terrorist attacks in the New York, there was an extensive scrutiny of the activities and operations of Islamic banks and financial institutions by the US government as well as other agencies and authorities in Europe and the countries in the OIC block. Although a few charities run by Muslims were put on the blacklists of the US and European authorities, no credible links were found suggesting any systematic associations of such charities with the Islamic financial institutions. In fact, the scrutiny of Islamic financial institutions helped in understanding the nature of the IBF business, and many Western financial institutions started having more confidence in doing Islamic financial business.

While a number of Western financial institutions decided to start their IBF activities following the 9/11 attacks, many extremist Islamic groups started distancing themselves from IBF. A major reason behind this growing distance between extremism and IBF is the view taken by extremist groups that IBF is not sufficiently Islamic.

WHY NON-MUSLIMS ARE INVOLVED IN IBF?

As IBF is purely a business phenomenon, it is not surprising to see many non-Muslims involved in it. Conventional financial institutions are engaged in IBF purely for opportunistic reasons. IBF is a US$2 trillion industry with huge growth potential, and a number of Western financial institutions want to strategically position themselves in the industry for prospective business opportunities.

Amongst non-Muslim individuals who have assumed importance in IBF for their academic as well as industry involvement, the following persons deserve special mentioning:

1. Professor John Presley
2. Professor Rodney Wilson
3. Professor Simon Archer
4. Stella Cox
5. Neil Miller

Professor John Presley Professor John Presley is the first non-Muslim recipient of the prestigious IDB Prize in Islamic Finance. As a professor of economics and head of economics department at Loughborough University, he played an instrumental role in developing Islamic economics, banking and finance as an academic discipline in the Western hemisphere. He, along with his colleague Humayon Dar, co-founded the first-ever master programme in Islamic economics, banking and finance ever offered by a university in the Western world.

Professor Rodney Wilson

In 2014, Professor Rodney Wilson became the second non-Muslim to receive an IDB Prize in Islamic Finance. He has the distinction of supervising the largest number of PhD students in the areas of Islamic economics, banking and finance, and has huge following and influence in the Muslim world, especially in the Middle East where his former students hold key positions in government departments and Islamic financial institutions. After retiring from Durham University, he is now serving as an Emeritus Professor in Islamic Finance at INCEIF.

Professor Simon Archer

Professor Simon Archer supervised Professor Rifaat Abdul Karim (the founding Secretary General of AAOIFI and IFSB) for his PhD research, and subsequently got involved in developing an accounting and auditing framework for Islamic financial institutions through AAOIFI. He has also been involved in developing a regulatory framework for Islamic financial institutions through his involvement with IFSB.

Stella Cox

Stella Cox is a senior financial expert who has helped the Islamic financial services industry by operationalizing commodity murabaha. Her contribution in IBF is more than of continuing to play her advocacy role through her speaking engagements at conferences, seminars, symposia and workshops on IBF in the West as well as in the Muslim world. She is also engaged with different government bodies in the UK to advise them on matters related with Islamic finance.

Neil Miller

Neil Miller is one of the most recognised and awarded legal professionals in the Islamic financial services industry. He was a member of the UK Treasury Committee of Islamic finance experts, a member of the FSA committee on Islamic finance and worked closely with the Muslim Council of Britain and other bodies to promote and develop Islamic finance in the UK. In January 2005 Neil was nominated as one of the “Hot 100” by The Lawyer in recognition of his work in developing the market-leading Islamic finance practice.

With over two decades of involvement in IBF in different leadership roles, Neil Miller is one of the influential opinion-makers in the Islamic financial services industry.

CONCLUSIONS

The above discussion demonstrates that there is no systematic effort to control the Islamic financial services industry for the benefit of any particular stakeholder group. The perception amongst some cynics that IBF is a religious phenomenon that aims at aiding the Islamist movement is not substantiated by facts. There are certainly a few shareholder groups who have control over the industry to maximise their profits. This is, however, a legitimate business objective in pursuit of which IBF is not much different from other forms of business.

Started as a pan-Islamic phenomenon, IBF is now seeking business in the markets that have not been on the radar of Islamic banks and financial institutions. In the UK alone there are six Islamic banks set up by shareholders groups originating from the Middle East. Similarly, there is an ever-increasing presence of Islamic financial institutions in the financial centres around the world. This should clearly show that IBF does not have any hidden agenda that movers and shakers of the industry may otherwise be pursuing. Any institution that puts forth itself for scrutiny of secular financial regulators cannot simply do so.