Malaysia’s CIMB and Dallah al Baraka Group form global Islamic investment alliance

Commerce International Merchant Bankers, Malaysia’s largest investment bank, and Al Tawfeek company for investment funds, part of Saudi based Dallah Al Baraka Group have signed a memorandum of understanding to create a global Islamic investment banking franchise.

  • E-Mail
By  Massoud Derhally Published  July 16, 2003

Commerce International Merchant Bankers Ltd. (CIMB), Malaysia’s largest investment bank, and Al Tawfeek company for investment funds, which is part of the Saudi based Dallah Al Baraka Group (DBG) signed a memorandum of understanding (MoU), to create a global Islamic investment banking franchise, aimed at creating the world’s first global Islamic investment banking alliance.

“The Memorandum of Understanding will open investment channels between two dynamic regional economies and for the first time give institutionalised access to Middle Eastern investors to Malaysia’s huge and prospering Islamic capital markets,” said Nazir Razak, CIMB Group’s chief executive.

According to Nazir Razak, Islamic investment banking has been marginalised as a force in international finance because Islamic financial institutions have remained regional. By joining forces and linking up Middle Eastern and Southeast Asian capital markets “The synergies unleashed by this proposed alliance could launch Islamic investment banking on to the world stage,” Razak added.

Al Tawfeek, which has assets in excess of US $16 billion and is run by the well-known Saudi businessman Sheikh Saleh Kamel, aims to expand its Middle East investment activities in Malaysia and the Far East. “Both companies aim to establish a global network to market and distribute Shariah compliant investment products,” said Saleh J. Malaikah, president of Al Tawfeek.

This is not the first time DBG has tried to build a global Islamic finance entity. In the summer of 2001, DBG and Kuwait based The International Investor (TII) had announced that they would create the world’s largest Islamic financial services group in what was then estimated to be a US $300 million merger deal.

But in a surprise statement in April 2002, TII said it regretted that following a request by DBG, both parties were discussing the possibility of unwinding the merger transaction known as “Albaraka & The International Investor”.

In a statement then, TII said, “Although difficult and complicated at this stage, both parties will work together amicably to ensure that the unwinding process is carried out in a speedy, effective and friendly manner.” It then went on to say, “This is a disappointing development, given the extensive merger integration work that has been undertaken to date. However, TII still believes that the strategic goals of the merger are very valid, and plans to pursue these independently.”

TII said the future of it and DBG would be resolved by an arbitration panel in London, UK, to be convened under the auspices of the International Chamber of Commerce. In the aftermath of the September 11 attacks, both Saleh Kamel and his company DBG, were named as defendants in the suit brought by the families of the victims of the September 11 terrorist attacks.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code