Background

The Shariah Advisory Council of the Securities Commission Malaysia (the SAC) had, at its 174th meeting held on 30 July 2015, deliberated on a proposed issuance of a sukuk Ijarah.

Issue

The issue in deliberation was on the permissibility of using mixed asset (asset which consists of both Shariah-compliant and Shariah non-compliant businesses/activities) (Mixed Asset) as an underlying asset for sukuk Ijarah.

Resolution

The SAC had resolved that it is permissible to use Mixed Asset as an underlying asset for sukuk Ijarah provided that:

(i) The rentals received from the Shariah non-compliant businesses/activities in the Mixed Asset must be below 20% of the total rentals received, if such rentals could be determined; or
(ii) The lettable area used for Shariah non-compliant businesses/activities in the Mixed Asset must be below 20% of the total lettable area, if the rentals could not be determined.