BENEFICIAL OWNERSHIP IN ISLAMIC FINANCE: HIGHLIGHTS ON SHARĪʿAHAND ACCOUNTING ISSUES INVOLVED.

BENEFICIAL OWNERSHIP IN ISLAMIC FINANCE: HIGHLIGHTS ON SHARĪʿAHAND ACCOUNTING ISSUES INVOLVED.

Section one

Introduction

The concept of beneficial ownership has long been established in Anglo-American common law through the development of trust law aiming at distinguishing beneficial ownership from legal ownership. Unlike the common law, civil law does not have provisions for trust that forms the basis for introduction of beneficial ownership in common law. Today, as Islamic banking and finance grows exponentially,the issue of beneficial ownership has become the centre of debate, among many stakeholders particularly Sharīʿah scholars who are points of reference on the Sharīʿah

compliance of all activities of Islamic banking and finance. Despite much attention given to this issue there remain gaps.

This article examines the Sharīʿah recognition of beneficial ownership focusing on its characteristics and attributes in Sharīʿah. It also examines selected Sharīʿahconcepts that share

similar attributes of beneficial ownershipunder English common law. Since the application of beneficial ownership expecially in ṣukūkis commonly applied to ṣukūkijārahthe paper has examined some of the accounting issues related to its [beneficial ownership] inṣukūkijārah.

The paper has used qualitative approach using content analysis to analyse data and information gathered from primary sources and secondary on this subject. It also employed document analysis as one of the tool to substantiate information from the literature.

The paper is structured as follows: First section involves an introductory part. Second section discusses the concept of ownership, its types and its characteristics with special focus on beneficial ownership. Third section examines the application and Sharīʿah issues pertinent to beneficial ownership. Fourth section studies some accounting issues pertaining to ṣukūkijārahas Sharīʿah mode of beneficial ownership followed by conclusion and recommendation.