CIMB Islamic CEO says Dana Gas’ case is a dud, won’t hurt market

KUALA LUMPUR: The head of the sukuk industry’s biggest underwriter says a bid by a Middle Eastern energy company to nullify US$700mil of its own bonds is bound for failure.

What’s more, Dana Gas PJSC’s case will leave the $2 trillion global Islamic finance industry relatively unscathed.

That’s the view of Mohamed Rafe Mohamed Haneef, the chief executive officer of CIMB Islamic Bank Bhd., which has underwritten more sukuk deals this year than any other company
worldwide, according to data compiled by Bloomberg.

Dana Gas said last month it no longer considered its two securities due in October as compliant with Islamic principles under UAE law. 

The claim exploits one of the weaknesses of the Shariah financing industry in the Arab world, where unlike Malaysia, most countries have no centralised Shariah boards to approve deal structures. 

The company has proposed restructuring the notes due in October on terms that are less advantageous to investors and plans to explain the legal action on a conference call with investors on July 6.

Given that the sukuk agreement is subject to laws in both the United Arab Emirates and the U.K., and judging by the fate of similar claims made by other companies, Dana Gas’s case will probably be dismissed, he said. 

“What the issuer failed to realise is that under English law the U.K. court has consistently stated they will only look into the intention of the parties as set out in the legal documents.”

A U.K. court is due to issue a ruling Wednesday on a bid by Deutsche Bank AG to oppose an attempt by Dana Gas to extend an injunction preventing sukuk holders from taking action regarding the debt. - Bloomberg

Limited time offer:
Just RM5 per month.

Monthly Plan


Billed as RM5/month for the 1st 6 months then RM13.90 thereafters.

Annual Plan


Billed as RM148.00/year

1 month

Free Trial

For new subscribers only

Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Next In Business News

Bitcoin slides below $60,000 on reports Israel strikes Iran
Stocks sink, oil jumps after Israeli attack on Iran
Yinson Production successfully places US$500mil bond issue
EG Industries expands partnership with US-based R&D firm
FBM KLCI rises despite broader market decline
Malaysia's exports rise in 1Q to RM362.41bil
Malaysia's economy likely grew 3.9% y-o-y in Q1 - advance estimate
Oil prices surge 3% on reports of Israeli strikes on Iran
US bonds rally on reports of Middle East missile strike
Fed policymakers agree: there's no urgency to cut rates

Others Also Read