comments of sukuk on 26th Feb 2024

COMMENTS ON THE ADVICE TO MR. NASRUTLLAH AND MAIRAJ ON THE ISSUANCE OF SUKUK PART II We are really appreciative that you shared these points of contact with us. I'm writing a critical comments on this encounter. Point 1 The 1st draft of the Sukuk law which was prepared with the assistance of the World Bank recommended Malaysian advisory company under has been cleared by the Ministry of Justice and is now in the offices of the Afghan Supreme Leader for approval. We have requested an English translated copy to review. Comments 1: The World Bank is a capitalist agency that serves as a pioneer institution for enemies to wage soft power when beaten in the battlefield (hard power). These transworld organisations exploited religious rhetoric to carry out their capitalist agendas throughout the Muslim agents. Malaysia, the United Arab Emirates, and Saudi Arabia are examples of countries that have created capitalist institutions while adhering to Sharia, rather than implementing Sharia. The goal of the IEA should be to undermine US soft power by keeping imperialist institutions out of Afghanistan. IEA should avoid association with UN agencies, including Islamic banks. Point 2: You have appraised us of the Afghani authority’s willingness to invite investors and financiers for Private Public Partnership (PPP) projects in Afghanistan. Afghan authorities welcome any private funding arranged by us to support the PPP. In this regard, Awfi is already situated in Afghanistan and is looking towards such initiatives which will is supported by our group. Comments 2: Regarding the funding of PPP projects, DAIMG advising against foreign loan funding. Instead, the IEA should obtain foreign investment in the form of equity participation and also financing through Mudarbah certificates [in Afghanistan we called it Islamic Tanweeli certificate (ITC)]. These ITC may be issued by Da Afghan Bank based on Mudarbah contract. They should be non-redeemable, non-tradeable in the market, and the gain should be based on the profit earned from their investment. The value of these ITC investment should not be determined through speculative trading (Gharar). The face value of the shares can be altered, at the time of their issue and re-issue. Point 3 We were told that the preferred structure for issuance of the Sukuk will be on “risk-sharing” basis using Mudaraba and Musharaka financing models. We have informed that there are successful models for such type of Sukuks used to in the Islamic banking worlds where Central Banks have been issued its Sukuk and/or CDs to be subscribed by all local banks as part of investing part of their capital for capital adequacy purposes. Additionally, there are sovereign companies who issue Sukuks to general public and the funds are used for financing projects and investments, an example of National Bonds was given. We can partner with Afghan authorities to assist in both aspects. However, a mandate is required with clear roles and responsibilities.

Comment 4: The ITC is a high-risk certificate that, if banks participate, will be shared among three partners: the bank, IEA/private enterprise, and investors. When a bank is engaged, they will mitigate the risk by utilising insurance (Takaful). The bank share and Takaful premium are additional costs of the project that eventually decrease the investor's profit share. DAIMG suggest, considering excluding banks and insurance companies from this certificate, making it a direct agreement between the investor and IEA/private entity. Banks often receive a portion of the profits in the form of service fees. Bank transactions are unnecessary except for the operation of capitalism to accumulate capital. In any case trading in money for money—the operation of money and capital markets is forbidden in Islam.