Special purpose vehicles and corporate Sukūk: How true is "True Sale"?

Monzer Kahf, Hiba Al-Saudi

Research output: Contribution to journalArticle


Sukūk is a current hot topic in Islamic finance discussions. This paper aims to examine sukūk and focus on the initial yet fundamental requirement of "true sale"- one that can determine if a particular sukūk is, in fact, a Sharīah compliant financial instrument. Ten sukūk are selected for the test, issued between the years 2004 and 2012 in seven countries. Selection is not random and based mostly on availability of information necessary for conducting the test. The sukūk are subjected to evaluation criteria developed by the paper and built on legal, financial, accounting and Sharīah requirements. The evaluation reveals that only one of the ten sukūk met the "true-sale" requirements. The rest contained several violations and therefore could not be considered Sharīah compliant instruments.

Original languageEnglish
Pages (from-to)3-21
Number of pages19
JournalJournal of King Abdulaziz University, Islamic Economics
Issue number2
Publication statusPublished - 2016



  • Sharīah compliance
  • SPV
  • Sukūk
  • True sale

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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