Beneficial ownership in sukuk ijarah: A shari'ah appraisal

Research output: Contribution to journalArticle

1 Citation (Scopus)

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.

Original languageEnglish
JournalInternational Journal of Islamic and Middle Eastern Finance and Management
DOIs
Publication statusAccepted/In press - 16 Oct 2017

Fingerprint

Ownership
Owners
Content analysis
Documentation
Liability
Islamic finance
Design methodology
Empirical investigation
Assets
Acceptance

Keywords

  • Ijarah
  • Islamic finance
  • Ownership
  • Sukuk

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Strategy and Management

Cite this

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title = "Beneficial ownership in sukuk ijarah: A shari'ah appraisal",
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 = "Ijarah, Islamic finance, Ownership, Sukuk",
author = "{Nik Abdul Ghani}, {Nik Abdul Rahim}",
year = "2017",
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