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Egypt’s treasury hails Al-Azhar’s nod to Islamic bonds bill

Souce:Xinhua Publish By Updated 02/05/2013 1:20 pm in World / no comments


CAIRO, May 1 — Egypt’s Finance Ministry on Wednesday hailed the consent of Al-Azhar, the country’s highest Islamic reference, to the Islamic bonds (sukuk) draft law.

“Yesterday’s final unanimous approval of the sukuk bill among various members of the Shura Council (the upper house) and Al- Azhar represents a strong push to this new investment finance system in the country,” official news agency MENA quoted Ahmed al- Naggar, the finance minister’s adviser, as saying.

The opinions of Al-Azhar’s Senior Scholars Authority have been “completely endorsed” before the Shura Council, the country’s temporary legislative authority, approved the bill on Tuesday and sent it to President Mohamed Morsi, al-Naggar said.

“We show all respect and reverence to the honorable scholars of Al-Azhar,” and their remarks contributed to some improvements to the sukuk law, he said.

Al-Azhar’s Senior Scholars Authority, the country’s reference for Islamic Sharia, was calling for amending some articles of the original version of the bill that they thought run contrary to Sharia principles — such as Article 4 that is related to issuing sukuk for state-owned assets, for concerns about the possibility for the country’s properties to be in foreigners’ hand.

Based on the amended version, fixed or movable “private” state- owned assets could be offered in sukuk only for “usufruct,” while “public” state-owned assets are “prohibited” to be issued in sukuk at all.

Moreover, “private” state-owned assets can only be offered in sukuk through a cabinet decision based on a report from the Finance Ministry after the approval of a Sharia commission from Al- Azhar, while the evaluation of such assets will be done by one or more specialized commissions formed by the cabinet.

Egypt’s constitution requires referring all draft laws that need a religious opinion to Al-Azhar institution, which will review them and then refer them back to the Shura Council for amendment or approval.

Last December, the cabinet approved the older version of the sukuk bill but it was rejected by Al-Azhar over concerns of key state assets being owned by foreigners, and suspicions about its fixed interests that are not allowed in Islam.

“By endorsing the required amendments, the law will be ready for issuing,” Ramadan Battikh, a Shura Council member and professor of constitutional law at Ain Shams University, told Xinhua.

The Shura Council should not refer the amended law back to Al- Azhar as its opinion is consultative not obligatory, Battikh said, adding that the amendments were all based on Al-Azhar’s opinions and the law will take effect once approved by the president.

He said the procedures of approval and publication will take about a week from the day the bill was submitted to the president.

The Islamic bonds, to be issued by the Finance Ministry, are expected to generate 10 billion U.S. dollars for the Egyptian government per year, according to an earlier official financial report.



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