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
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