“Investors trapped by the financial storm in the United Arab Emirates are in unknown legal territory as they try to protect their billions.” (The Times, 10 December 2009)
The Dubai default debacle demonstrates in stark detail how the lack of transparency and failure to disclose relevant facts make Shariah Finance risky. Long ago–decades ago–the rest of the financial world learned the importance of proper transparency and full and fair disclosure when it comes to investing. Financial laws and regulations have been put in place in the civilized world to at least try to ensure that transparency, accountability and full and fair disclosure exist. There have been notable instances in which these efforts have failed or proved inadequate, but the effort continues and new laws and regulations are almost always created when breakdowns are discovered.
Shariah, on the other hand, is not part of the civilized world. Nor is there any tradition or history of transparency when it comes to Shariah. On the contrary, the whole history of Shariah runs against the spirit of transparency, accountability and disclosure. In financial matters, as well as in other matters involving everything from family to society to war, Shariah is controlled by unaccountable scholars who were educated at Jihadist institutions that the Western world can only begin to understand. That these monsters–horrible men such as Mufti Taqi Usmani and Sheikh Yussef al-Qaradawi–can exercise control over financial transactions involving billions of dollars is one of the worst absurdities in the entire financial world.
The definitive work on the lack of transparency, accountability and disclosure in Shariah Finance, “Shariah’s Black Box: Civil Liability and Criminal Exposure Surrounding Shariah-Compliant Finance,” was written by David Yerushalmi and is available for download for free from the Center for Security Policy web site:
http://www.centerforsecuritypolicy.org/p17571.xml
It is too bad that the lawyers quoted in the London Times article linked below didn’t read Mr. Yerushalmi’s report BEFORE Westerners got involved with Shariah-Compliant finance in the United Arab Emirates. Shariah finance was sold as “ethical,” which no doubt made Westerners feel more at ease about the safety and security of their investment. Now, it turns out, it is the misplaced faith in that Shariah compliance which has led to this crisis and it is Shariah which provides the major obstacle to them seeing their investment money returned.
At some point in the not-too-distant future, Western financiers will be introduced to just how much sympathy the financial jihadists who comprise Shariah advisory boards and courts have toward infidels who lost money in what was apparently an investment swindle…
http://business.timesonline.co.uk/tol/business/law/article6950725.ece
