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- DFM Sharia Board finds 3.66 per cent of 2007 cash dividend to be non-Sharia compliant
- Total cash dividend of DFM shares is 10 per cent of share value
The Dubai Financial Market’s (DFM) Sharia Board announced that 3.66 per cent DFM’s 2007 cash dividend that has been distributed to shareholders is to be considered non-compliant with Sharia law.
Dr. Hussein Hamid, Chairman of the DFM Sharia Board, said: “In line with Dubai Financial Market’s objective to become the first Islamic financial market in the world, and as part of our commitment to the principles of Sharia in all market transactions, we have determined that the percentage of the 2007 dividend that is non-compliant with Shari’a law is 3.66 per cent.”
DFM shareholders have already received the cash dividend of 10 per cent that was approved during the company’s Annual General Meeting held on March 25. The dividend’s distribution followed the issuing of Islamic standards for acquiring and trading of shares of companies listed on DFM. These Islamic standards were established in order to enable DFM to become the first Islamic financial market in the world.
Dr. Hamid added: “To give an example of what this means, take a hypothetical share amount valued at AED 100,000. A 10 per cent cash dividend of that share is worth AED 10,000. Since 3.66 per cent of that cash dividend has been declared non-compliant with Sharia law, AED 366 is the non-compliant amount. We suggest that amount be given to charity.”
As part of its efforts to become the first Islamic financial market, DFM will classify the companies that trade on its exchange into two groups: those that are Sharia compliant, and those that are conventionally traded. The effort to become a fully-fledged Islamic financial market is ongoing.
