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Sharia Finance and the "Mystery of the Missing $2 Million in Gold Bullion"

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  • Tarek Fatah
    Friends, Here is a quick lesson for all those who are charmed by the snake oil salesmen peddling Paradise in the form of Sharia Banking. In reporting the
    Message 1 of 1 , Dec 31, 2011
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      Friends,

      Here is a quick lesson for all those who are charmed by the snake oil salesmen peddling Paradise in the form of Sharia Banking. In reporting the scandal, note how the politically correct Toronto Star attempts a burka, by identifying the bankrupt Sharia finance company as "an insolvent mortgage company."

      I'm surprised The Star even carried this report since Goldfinger in the story was repeatedly portrayed by the newspaper in glowing terms as the epitome of innovation, never once questioning the religious blackmail of eternal hellfire that goes hand-in-hand in the marketing of Sharia banking.

      Read and reflect.

      Tarek
      --------
      December 31, 2011

      Mystery of the Missing $2 Million in Gold Bullion

      John Goddard
      The Toronto Star
      http://www.thestar.com/business/article/1109060--gold-night-drop-dramatizes-receivership-case

      The head of an insolvent mortgage company unloaded $2.2 million in gold and silver from his car at a Rexdale parking lot at night, according to his own testimony, and handed it to a man who has since disappeared.

      Court documents also tell of gold bullion and thousands of silver coins being ferried around the city in private cars, with no added security, from downtown banks to outlying business offices. One participant has returned the silver. Court-appointed receiver Grant Thornton Ltd., in the Ontario Superior Court of Justice, is still demanding nearly $2 million in gold bars.

      The only person who seems to know where it is — a Toronto resident from Egypt called Joseph Adam — left for Egypt two months ago and cannot be found.

      “He should come here and tell us (where the gold is),” Mississauga Muslim cleric Yusuf Panchbaya testified in November at the receivership hearings. “If he doesn’t, then in that case he can let us know even by phone or whatever, so where it is, or if need be, we are even prepared to go to Egypt and look for it.”

      “Do you think he took the gold to Egypt?” the examining lawyer asked.

      “I don’t think he has taken it with him to Egypt,” the witness replied.

      The troubled mortgage company is actually two related firms called UM Financial Inc. and UM Capital Inc., the first of which was founded in 2004 by Brampton resident Omar Kalair as a venture into “sharia compliant” home mortgages.

      Under one interpretation of Islamic law, or sharia, lending money at interest is forbidden. Under another reading, only usury or charging exorbitant interest is banned.

      In a sharia-compliant mortgage, rather than pay interest, a homebuyer rents the home from the money lender, gradually purchasing the property. Ownership is transferred when the full value is paid.

      Debate among Muslims on the practice can be fierce, with entire books written on the subject in the United States.

      Court documents show 172 homeowners were involved with the UM companies when they went into receivership in October, and UM presenting itself as Canada’s leading sharia mortgage firm.

      But the case is attracting attention.

      For several years, several Canadian banks have experimented in offering sharia-compliant services and in January the University of Toronto is to offer its first course on the subject. Walid Hejazi, of the university’s Rotman School of Management, has said his three-day course will cater to executives who “want to get an edge to differentiate themselves.”

      Kalair originally established his mortgage business in partnership with Central 1 Credit Union, which put up $49 million. Last March the credit union and Kalair fell out. Central 1 took legal action to send UM into receivership, with the credit union claiming it is owed more than $31 million.

      UM opposed the action, stalling it for months, during which Kalair pursued his precious-metal transfers.

      On Aug. 30, he drove to Scotiabank’s main branch at King and Bay Sts., according to his court testimony. He bought $889,695.90 (U.S.) in gold bullion, in the form of 15-kilogram bars. He then drove away and stored them at his office at 789 Don Mills Rd., near Eglinton Ave. Three further purchases in early September led to his possession of another $978,263.64 in gold bars and at least $322,343 in silver, including 5,699 one-ounce coins.

      “So by Sept. 8, you’re sitting in your office with almost $2.2 million of precious metals, correct?” lawyer Neil Rabinovitch asked, on behalf of the receiver, in a Nov. 25 examination.

      “Yes,” Kalair replied.

      “And again, you don’t get any extra insurance or take any additional precautions other than locking your door?”

      “No,” said Kalair. “Our office has been very secure. We never had any issues and it has security at the front.”

      The nighttime Rexdale drop-off came next.

      Muslim cleric [Yusuf] Panchbaya had once been chairman of UM Financial and was now claiming $2.7 million on behalf of himself and four other local clerics. The group said they had given the company free sharia guidance for several years and eventually expected to be paid.

      On Sept. 19, [Imam] Panchbaya incorporated the five as Multicultural Consultancy Canada Inc., or MCC, and named himself chairman. He then applied to have MCC intervene in the court case.

      “You were concerned that the receivership could render the mortgages not sharia compliant, correct?” lawyer Rabinovitch asked him in court and Panchbaya agreed.

      On Sept. 26, however, the receiver denied MCC standing, saying no contractual relationship existed between it and the UM companies.

      That same day MCC’s Panchbaya had UM’s Kalair draft an invoice for $2.7 million for the clerics, giving the two bodies a contractual relationship. No supporting documentation as to the clerics’ work or expectations exists, Kalair has testified.

      “You can’t show me. . . a single piece of paper prior to this invoice that you prepared on Sept. 26, that shows (the clerics) were demanding payment, correct?” Rabinovitch asked in court.

      “Only verbal,” Kalair replied.

      Elsewhere in the court documents, the receiver’s office complains: “(UM’s) available books and records appear to be incomplete and/or were not maintained in an orderly or up to date manner.”

      On Oct. 4, Panchbaya chose as MCC’s financial manager the Egyptian Joseph Adam. He is described in testimony as running a business called the Amira Islamic Fashion and Book Centre Inc., at Rexdale Blvd. and Islington Ave. He is also said to have dealings with three Egyptian sharia scholars retained for advice on a sharia-compliant Mastercard, not part of UM Financial or UM Capital.

      That same Oct. 4, after dark, court testimony shows, Adam waited near his store in a Shopper’s Drug Mart parking lot. Kalair arrived with the $2.2 million in gold and silver as partial payment, he testified. Precious metals were necessary instead of, say, a bank cheque, because MCC did not yet have a bank account, he told the court.

      On Oct. 6, UM dropped the receivership fight and went into receivership the next day.

      On Nov. 1 Adam made the third and last parking-lot drop of the case. He relinquished the silver to Panchbaya, who later brought it to the receiver. Adam has since disappeared. Kalair testified that Adam told people that his wife, who has never been to Canada, was expecting a baby in Egypt.

      The search for the gold and silver began.

      “(Adam) was travelling overseas,” Kalair testified. “He said he’ll keep the gold secure . . . . The gold was just, from my understanding, one box, and the silver was 14 boxes.”

      Where Adam stashed the gold, nobody seems to know. By court order, his premises have been searched and no gold found.

      The receivership case continues.
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