Holders of Dana Gas’s Islamic bond could be liable to repay the company excess on “account profit payments” as legal advice shows the terms and conditions make it unlawful in Sharia law.
The company, the Middle East’s first and largest regional private sector dealer in natural gas, said it had sought legal advice on the matter.
And the independent advisers said that the terms of the Sukuk – a type of Islamic bond that it not supposed to infringe on the law – are not compliant with Shari’a principles and are unlawful under the laws of the United Arab Emirates (UAE) and therefore are “void and unenforceable”.
A statement on the company’s website added: “The final outcome of the ongoing litigations in UAE courts would likely result in a significant liability for the Sukukholders to repay the company excess ‘on account profit payments’ based on a lawful reconciliation of the matter.
“The company, in line with detailed public disclosures that it has made to the Securities and Commodities Authority (SCA) and through ADX, is pursuing the litigation route to resolve the matter and is confident pursuant to independent legal advice of prevailing in its interpretation of the outcome.”