Contracts and Deals in Islamic Finance: A User s Guide to Cash Flows, Balance Sheets, and Capital Structures

Chapter 22Sukuk and Rights of Sukuk Holders

Many works on Islamic finance begin with references to existing material, books, and publications on the topic and then attempt to provide their own critique or just toe the line of their predecessors. I have made every effort to avoid this pitfall, simply because I believe as a writer it hinders my ability to express my own ideas on a subject. In fact new publications or PhDs are meant to offer new insight into existing phenomenon or provide a platform for observing new phenomenon altogether.

I provide the reader with an exhaustive list of what has been said about sukuk by other authors. I take my own unique stance on this subject, as this is the most eye-catching topic in Islamic finance and grabs the most headlines.

Before I do touch on the topic I first examine briefly other capital markets instruments that exist in conventional and Islamic finance.

Financial markets exist to primarily help fund deficit individuals, corporations, or governments. We initially focus on corporations for the discussion on sukuk. Corporations are also of various size and complexity and have access to various sources of funding. A company may start as a sole proprietorship, relying initially on the funding capacity of the founding owner. This company may evolve into a partnership to raise capital from an additional partner or managerial expertise, shared business skills, networks, and so on. Sole proprietorships and partnerships are not required to disclose ...