Like virtually all other sectors, Shariah-Compliant Finance has been hit hard by the world financial and economic crisis, yet the promoters of Shariah-Compliant Finance continue to tout their methods as a safety net against risk. The article linked below from the “Wealth Bulletin” is no exception.
These claims amount to nothing but propaganda and a review of the statistical evidence reveals that Shariah-Compliant products have faired similarly to conventional products. For instance the FTSE All-World Index of 2800 stocks and the FTSE Islamic Index have both fallen over 40% in the past 6 months.
The fact that members of the Shariah Finance industry are willing to play so fast and loose with the truth is characteristic of an industry that spends most of its time covering up key aspects of its business model, such as the involvement of Jihadists on its advisory boards and governing bodies and the concealment of zakat payments and the total lack of disclosure of where these payments end up.
Far from being transparent, Shariah-Compliant Finance is an opaque sector. Lack of full and fair disclosure and transparency prevents proper due diligence and, historically, such conditions lead to scandals and harm to investors…