DUBAI Jan 30 Kingdom Holding Co, the
international investment firm of Saudi billionaire Prince
Alwaleed bin Talal, has formed a sharia board of prominent
scholars in order to raise more of its funding through Islamic
The decision by one of the most prominent investment firms
from the Gulf is likely to be seen as a boost to the Islamic
finance industry, which obeys religious principles such as bans
on interest payments and pure monetary speculation.
"The sharia committee was established to study the gradual
conversion of future sources for loans for the company to be
sharia-compliant," Kingdom said in a brief statement.
Sharia boards decide whether products and activities obey
Islamic principles. Kingdom's four-member sharia board includes
high-profile Saudi scholars Sheikh Mohamed Ali Elgari and Sheikh
Abdullah Sulaiman Al Manee'a, who will serve as chairman.
Elgari serves on several sharia boards including the Islamic
arms of HSBC and Standard Chartered Bank. Al
Manee'a is chairman of the sharia board of Saudi Arabia's
National Commercial Bank and a member of the senior
scholars council of the Kingdom of Saudi Arabia.
Kingdom Holding officials could not be contacted to
elaborate on the statement, which appeared to be a recognition
of the growing size and liquidity of Islamic capital markets.
Global issuance of sukuk (Islamic bonds), which are
structured to avoid the payment of interest, hit about $121
billion in 2012, according to Thomson Reuters data, up from
around $85 billion in 2011. Islamic banking is estimated to
account for about a quarter of the Gulf's banking sector.
Kingdom, which holds stakes in major Western companies such
as Citigroup, News Corp and Twitter, did not give
any indication in its statement that it would adjust its
investment strategy in response to Islamic principles.
Last week the company posted a net profit of 209.6 million
riyals ($55.9 million) for the three months ended in December,
up 11.6 percent from a year earlier.
Last October, banking sources told Reuters that Kingdom was
planning to raise up to $500 million from a syndicated loan,
with the proceeds largely to refinance existing debt. Earlier,
the company had considered a maiden debt issue in the Saudi bond