Special purpose vehicles and corporate Sukuk : how true is “true sale” ?

الملخص EN

Ṣukūk is a current hot topic in Islamic finance discussions.

This paper aims to examine ṣukūk and focus on the initial yet fundamental requirement of “true sale”- one that can determine if a particular ṣukūk is, in fact, a Sharīʿah compliant financial instrument.

Ten ṣukūk are selected for the test, issued between the years 2004 and 2012 in seven countries.

Selection is not random and based mostly on availability of information necessary for conducting the test.

The ṣukūk are subjected to evaluation criteria developed by the paper and built on legal, financial, accounting and Sharīʿah requirements.

The evaluation reveals that only one of the ten ṣukūk met the “true-sale” requirements.

The rest contained several violations and therefore could not be considered Sharīʿah compliant instruments.