The article linked below is pro-Shariah Finance, but it brings up a good point. It doesn’t get to that point until the second half of the article, but it does eventually get to an interesting point.
The article points out that the Shariah Finance industry is overly dependent on a few Shariah scholars, which is absolutely true. The author then frets over the question of where the new generation of scholars will come from. But that is not the most germane point.
The fact is, a relatively few Shariah scholars sit on multiple Shariah advisory boards. No matter how much the financial jihadis want to deny it, this presents a conflict of interest, especially where scholars sit on the boards of competitive financial institutions.
But it may even go beyond that–to a sinister aspect of Shariah finance. The Shariah advisors get to decide where zakat (tithing) payments go. They also decide where “purification” payments go.
We haven’t covered “purification” in some time, so we will take the opportunity to do so now. Purification is the process by which proceeds earned in a Shariah finance transaction or entity that are deemed “haram” (unislamic or not in compliance with Islamic law) are disposed of. This can happen when an account inadvertently earns interest, which is forbidden. Or it can happen if a company that a Shariah fund invests in enters into a haram business, such as pork processing. Under purification, the proceeds from the haram activity or transaction must be donated to Islamic charities to “purify” the funds. The Shariah scholars designate those Islamic charities.
This brings the possibility of racketeering to mind as a few Shariah scholars sending zakat and purification money to Islamic charities leads to the real possibility of terrorist financing, since no fewer than 80 Islamic charities have been implicated in funding terrorism and one of the world’s most prominent Shariah scholars, who happens to sit on several Shariah financial advisory boards, Sheikh Yusef al Qaradawi, heads up the Union of Good, an umbrella group of 53 charities based out of Saudi Arabia. The Union of Good has been designated a terrorist entity by the US Treasury Department.
In other words, the fact that there are so few Shariah scholars presents a real hazard both to the industry and potentially to the entire free world.