Dana Gas’s sukuk move is a surprising one | The National

Dana Gas’s sukuk move is a surprising one | The National:

"Dana Gas (DG) made headlines last week with reports that is was announcing that its own sukuk were "unlawful". It does seem a little bit surprising that a company would deem its own securities as unlawful. I mean, doesn’t that open DG up to liability for issuing the "unlawful" sukuk in the first place? The discussion that followed was wide. Indeed, Bloomberg published one article with the title "Why everyone’s talking about Dana Gas’s sukuk", from which I capture some of these facets. One is how DG’s actions would affect the whole sukuk market with Abdul Kadir Hussain, the head of fixed-income asset management at Arqaam Capital, quoted as saying [not paying coupons because the instrument is not Sharia-compliant is] "something that has a much wider implication for the sukuk market in general". The implication appears to be that the apparent manoeuvre by DG to invalidate its own sukuk on Sharia non-compliance grounds harms the whole Islamic finance sector. Indeed, Mr Hussain is further quoted in the article as saying "… clearly the company is trying to squeeze sukuk holders to the benefit of shareholders and that is a strategy that will end up hurting everybody down the road". If this analysis is correct, it could have a detrimental effect on Dubai’s goal of becoming the Global Centre for Islamic Finance."



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