Beneficial ownership in sukuk ijarah : a shari’ah appraisal
International Journal of Islamic and Middle Eastern Finance and Management
ISSN: 1753-8394
Article publication date: 16 October 2017
Issue publication date: 15 March 2018
Abstract
Purpose
The purpose of this paper is to critically study the application of beneficial ownership in sukuk ijarah by analysing the fiqh interpretation on the concept of beneficial ownership.
Design/methodology/approach
This is a theoretical paper using content analysis approach that delves into the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in sukuk ijarah from the Islamic perspective.
Findings
The paper concludes that the beneficial ownership should be considered as true ownership because Shari’ah has allowed the transfer of ownership by a sole basis of contract (offer and acceptance). Although the sukuk holders are not registered as the legal owners in the Land Office, the documentations and agreements have clearly specified the owners and their liabilities.
Research limitations/implications
Empirical investigations into how sukuk holders are responsible for the underlying assets in sukuk ijarah.
Practical implications
It is therefore important to develop parameters for beneficial ownership to govern the use of the concept in Islamic finance.
Originality/value
The paper shows the fiqh interpretation on the beneficial ownership in sukuk ijarah while considering all the constraints and challenges in the implementation of sukuk.
Keywords
Acknowledgements
This research paper is sponsored by the Malaysian Ministry of Higher Education under the Fundamental Research Grant Scheme entitled “Pembinaan Parameter Syariah Prinsip Pemilikan Bermanfaat (Beneficial Ownership) dalam Kewangan Islam” (The Development of Shari’ah Parameters for the Principle of Beneficial Ownership in Islamic Finance) under FRGS/1/2015/SS01/UKM/03/2 fund.
Citation
Nik Abdul Ghani, N.A.R. (2018), "Beneficial ownership in
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited