An interest in interest-free Islamic finance
Imagine creating a spit of land in a harbor and building a hotel on it, as was recently done in Dubai, all without loans.
Such a deal would fly in the face of Western finance sensibilities, yet such is the everyday case with Islamic law and with some of the deals that cross Umar Moghul’s desk.
Moghul leads the Islamic finance practice of Murtha Cullina L.L.P., which has one of the few such law practices in the United States. In addition to Moghul, the group includes attorneys Midhat Sayed and Mally Chakola in the firm’s Stamford office.
Islamic investors represent a significant opportunity for U.S. interests and multiple Connecticut companies already do big business in the Islamic world, including Fairfield-based General Electric Co. and Hartford-based United Technologies Corp.
At the same time, financial transactions under Shariah law bring singular challenges – most notably, a prohibition on charging interest. Instead, loan transactions are structured like a sale and leaseback, allowing mortgages and other large transactions to take place.
During the past 15 years, Islamic finance in the United States has taken two related paths, according to Isam Salah, an attorney with King & Spaulding in New York City. Both nonbank financiers and conventional financial institutions increasingly are developing Islamic finance and investment products; UBS AG and Royal Bank of Scotland PLC, which are among Stamford’s largest employers, both have Islamic finance “windows” for businesses looking to transact business between the United States and companies adhering to Islamic principles.
At the same time, non-U.S. Islamic institutions and their clients have examined investments in U.S. assets, including property and companies.
The son of immigrants from Pakistan, Moghul got undergraduate and law degrees at the University of Pennsylvania, and worked at King & Spaulding himself before transferring to Murtha Cullina.
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