A prominent Islamic scholar from Saudi Arabia has rejoined the sharia supervisory board of the Malaysia-based International Islamic Liquidity Management Corp (IILM), according to the body's website.
The return of Jeddah-based Mohamed Ali Elgari could increase the chances that Saudi Arabia's Islamic banks, which are some of the largest in Islamic finance, will access the IILM's $1.35 billion sukuk programme, boosting secondary market trading in the instruments.
Elgari, an industry expert who sits on over 80 sharia boards around the world, was a member of the IILM's first sharia board announced in December 2010.
But he left the board last year in a reshuffle which occurred at roughly the same time as the surprise pull-out from the IILM of Saudi Arabia as a shareholder.
The departure of Elgari and his country's pull-out were never publicly explained, and neither his office nor the IILM responded to Reuters requests for comment on Wednesday.
It was unclear if there were differences of opinion on the sharia board about the IILM's plans for its sukuk programme, or whether the events were related to internal management shifts at the IILM, which changed its chief executive in 2012.
Elgari's return means the IILM sharia board now comprises five scholars from Malaysia, Kuwait, Indonesia, Nigeria and Saudi Arabia.
The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was established to address a shortage of liquid, investment-grade instruments which Islamic banks can trade across borders.
Its Luxembourg-domiciled sukuk programme has expanded since its debut last August, selling $860 million worth of short-term paper in January and $490 million in February.
The IILM has also increased the number of primary dealer banks handling its programme to nine from seven; Indonesia's central bank is looking to sign up a local bank as primary dealer.- Reuters
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