Gonski and ANZ board exposed to shariah compliance risks : Are they aware, and what consequences from the 1 MDB scandal

by Ganesh Sahathevan


ANZ's partner in Malaysia, AMMB, owns part of an Islamic or shariah complaint bank called AMIslamic.ANZ is represented on the AMIslamic board, and at least in the past, the
 ANZ appointed AMMB managing director signed-off AmISlamic's financial statements.

That an Islamic bank must remain shariah compliant in order to retain its hallowed status is obvious, and it is clear that the 1 MDB scandal   has at the very least resulted in offences with regards  the prohibition against dealing in  illicit funds.


This could give rise to action by depositors and shareholder  against the bank, its directors and managers. ANZ and its board, led by David  Gonski come within the latter two, and are probably so exposed. It is however unclear if they realize the fact, or have even considered that compliance with the sharia is something they are exposed to.Only Lee Hsien Yang, by virtue of his being in the past chairman of the Islamic Bank Of Asia, appears to have had any exposure to Islamic finance.
The board may want to seek urgent advice from him about what sharia compliance entails, and what the penalties for non-compliance might be, quite apart from any civil claims. These could be important, given that in some jurisdictions the punishment for theft is amputation of the offending limb.
END







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