In October, Goldman registered its “sukuk” programme with the Irish Stock Exchange. It set up a Cayman Islands-registered special purpose vehicle, Global Sukuk, to issue a bond-like instrument based on murabaha, a cost-plus-profit arrangement that complies with Islamic law.
Some analysts, however, have suggested Goldman might use the proceeds of the issue to lend money to clients for interest, which would be against Islamic law, and that the issue might not trade at par value on the Irish exchange, which would also contravene sharia law.
Asim Khan, managing director at Islamic finance advisory firm Dar Al Istithmar, said such speculation was groundless. “Bulge-bracket banks such as Goldman Sachs can bring to Islamic finance their sophistication and depth of experience … which can take Islamic finance closer to its true ideals,” he said.
Several big western banks have considered raising money through Islamic finance, which bans the payment of interest and pure monetary speculation.