Shariah Analysis of Sale/Debt Based Sukuk: the Malaysian Saga

The Malaysian sukuk market dominated by sale/debt based sukuk has experienced phenomenal growth ever since its inception. However, it has also raised many controversial issues. A financial product's claim of being sharia compliant cannot be accepted unless it is shown to be in consonance with the objectives of sharia. The mechanisms used in such sukuk today, however, fail at these objectives, rendering such sukuk exactly the same as conventional bonds in terms of their economic results.