By Habhajan Singh
A local Islamic finance consulting company anchored by prominent Shariah scholar Dr Mohd Daud Bakar is looking to expand its presence in Australia and Europe to tap the growing business opportunities in those regions, attempting to tap into changes in regulation to accommodate Islamic finance and also the growing need to structure Shariah-compliant products.
Amanie Business Solutions is looking at opening up offices or partnerships in Australia, while the choice for Europe is between London and Luxembourg.
"There are concrete proposals to the [Australian] Government to amend some laws to accommodate Islamic finance. These are some of the areas of interest," Dr Daud Bakar told The Malaysian Reserve.
He was referring to the Australia financial centre report presented to the Australian Parliament and made public in mid-January which had recommended on withholding tax on offshore borrowings and on Islamic finance, to improve its ‘access to offshore pools of savings at competitive rates, so as to provide more diversified and cheaper funding for Australia’s investment needs’.
Commonly known as the Johnson Report, it was commissioned by the Government in September 2008 as part of its commitment to secure Australia’s future as a leading financial service centre.
The move would make Amanie a Shariah consultancy with one of the widest global presence. Most Shariah consultants tend to concentrate in either London or Dubai, while Malaysia is populated more by individual Shariah scholars who work mostly with Islamic banks and takaful operators who require their services.
The developments coming out of Australia would have been the impetus for legal firm Zaid Ibrahim’s to open offices in Sydney and Melbourne in the December 2009.
One of the largest local legal firms in Malaysia, Zaid Ibrahim had stated that its primary focus would be to promote Shariah-compliant business. Zaid Ibrahim, with offices in Singapore, Thailand, Indonesia, Vietnam and Dubai, had set up in 2008 an Islamic finance advisory firm called ZI Shariah Advisory Sdn Bhd.
Dr Daud Bakar, who also chairs the influential Bank Negara Malaysia’s Shariah Advisory Council (SAC), is no stranger to the Islamic finance scene in Australia. Amanie has advised a number of deals originating from there, including LM Investment Management Ltd’s (LM) Islamic property fund and Crescent Investments Australasia Pty Ltd’s equity fund, both being the first of their kind in that part of the world.
"LM came to see us in Dubai. In fact, they were our first clients in Dubai," he said. The Dubai-based vehicle, Amanie Islamic Finance Consultancy and Education LLC chaired by Dr Mohamed Ali Elgari, signed off the fatwa for Crescent’s fund. The other signatories on that document, displayed on the company’s website, are Dr Daud Bakar, Dr Muhamad Amin Ali Al-Qattan and Dr Osama Al-Dereai.
LM, which described itself as privately owned specialist Australian income funds manager, floated the LM Australian Alif Fund. It said that it is a 'Shariah compliant fund, with fatwa confirming the Shariah compliant status' of the funds and its investments, suitable for investors seeking 'Australian assets delivering profit in a Shariah compliant manner, and is available for investment in a range of major international currencies'.
As for the European move, industry observer note that European cities like London, Dublin and Luxembourg are vying to be international hubs for Islamic finance.
Luxembourg, for example, is key domicile of funds in Europe and have amended a number of taxation laws to accommodate Islamic finance funds. "Here, they would be interested in originating and listing of funds," said one observer.
Dr Daud Bakar said that Amanie sees 'potential business expansion' in Luxembourg. "We have some experience endorsing few Islamic funds licensed from Luxembourg using UCIT 3 and SICAV structure," he said.
UCITS3 is an European Union initiative. Funds go through a stringent regulatory process which then allows it to be floated in the EU jurisdictions without much further local clearance. SICAVs, a vehicle much like an umbrella for funds, are increasingly being cross-border marketed in the EU under the UCITS directive.
Asked what prompted the move to expand further, Dr Daud Bakar said: "Looking at global financial movements, we’ve seen some strong interest in some jurisdictions like South Korea, Australia, Luxembourg, Kazakhstan. We like Kazakhstan, where we have partners who take care of our interest.
"We are a global Shariah firm, originating from Malaysia. We then expanded to DIFC [Dubai International Financial Centre] in 2008. Now we are seriously considering to position Amanie in other new potential markets and jurisdictions. Islamic finance is a global industry. We need to be close to out clients, be in the same time zone. We’re proud to fly the Malaysian flag in other countries."
(This story appeared in The Malaysian Reserve on 19 March 2010. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh) Any source
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