After attending a seminar a month ago in UK, I was curious on what had materialized following the AAOIFI guidelines on Sukuk. In my previous post on Sukuk, I was adamant that Taqi Usmani was referring to Sukuk Ijarah. When a speaker (renowned academician in the field) in the seminar talked on Sukuk, I asked him accordingly.
He informed me that the Sukuk informed by Usmani was not Sukuk Ijarah and was one of the Profit & Loss sharing concepts, Sukuk Musharakah.
I stand corrected (though, I am still adamant that Sukuk Ijarah still has issues due to its resemblance to a riba-based transaction). If it smells like riba, looks like riba...isn't the effect of such transaction similar to riba?
If so, what exactly is prohibited? Is it the technical form of riba (such as the 'increase' found on a loan) or the substance/essence of riba (i.e. the unjustified increase where there is one party assured of a profit while the other is not, and the effects that this transaction brings not only to one party or the other, but the socio-economic system as a whole)?
I stand corrected (though, I am still adamant that Sukuk Ijarah still has issues due to its resemblance to a riba-based transaction). If it smells like riba, looks like riba...isn't the effect of such transaction similar to riba?
If so, what exactly is prohibited? Is it the technical form of riba (such as the 'increase' found on a loan) or the substance/essence of riba (i.e. the unjustified increase where there is one party assured of a profit while the other is not, and the effects that this transaction brings not only to one party or the other, but the socio-economic system as a whole)?
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