LOC19:45
16:45 GMT
BY Nawab Khan
BRUSSELS, Nov 22 (KUNA) -- A financial firm in Luxembourg has developed a
concept combining some of the modern financial techniques with the principles
of Sharia (Islamic law) to design a new type of investment set up which it has
named "Imtiaz".
"Islamic finance is an opportunity for the world to develop a new ethical
approach in financing a variety of projects and, definitively, in encouraging
entrepreneurship," Jean-Paul Letombe, Managing Director of the firm Otim -
business solutions, told KUNA in an interview.
He explained that the turmoil in conventional finance was big enough to
"force us to reconsider what we did and how we did it for many years".
"Increase of regulation should help but the best of all would be to change
in our minds the way we see things, and to adopt new and better practices in
designing and running financial products," he said.
Letombe was in Brussels to attend a conference on Islamic banking held last
week.
"Here is the point where we should consider Islamic finance as a large part
of the answer, especially if we focus on its foundations rather than just on
the technical content of its contracts," said the European finance expert.
"With the generous help of people in the Middle East, we have discovered
Islamic finance by learning first its foundations and holy values, and next by
looking through the different contract types," he stated.
"Progressively we got a better understanding, and when we got enough
confidence we humbly combined some of the financial techniques already in our
hands with the principles of Sharia, to design a new type of financial product
that we named Imtiaz," Letombe added.
Imtiaz is a product involving investors, a financial company, an
engineering company, and a state-owned company for a period between 15 to 30
years, and by using the "concession principle" (Imtiaz).
In essence, one or many investors can collectively invest directly into the
development of an industrial project where a nominal production can be
estimated for example typically in a, but not limited to
power/water/vegetable plant.
Under the concept, the design, development, operating and maintenance of
the project is managed by the engineering company acting as a Mudarib.
Letombe says Imtiaz has the potential to deliver high returns (six percent
to 15 percent and eventually a bit more) without the use of any leverage,
speculation, or complex structures.
"Imtiaz will never put excessive pressure to maximize returns to repay
debt, because there is no leverage at all. We are open to share and to refine
our Imtiaz concept with those Islamic financial institutions that may be
interested in the subject," he told KUNA. (end)
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