Islamic Finance
Secura, a SEBI-registered real estate venture capital fund has been certified as India’s first Shariah compliant real estate VCF. This fund was formed as a contributory trust under the provisions of Indian Trust Act, 1882. The trustee of the Fund is IL&FS Trust Company Ltd. The Shariah certification of the fund is done by Taqwaa Advisory and Shariah Investment Solutions (TASIS). Secura has begun mobilizing its funds from May 2009, and the final closing of the Fund was on 25th April 2010. Now the fund disbursement is going on. The first commercial project of Secura called Eon, located at Thondayadu By-pass, is expected to complete by Novemer 2010.
How does Secura operate as a Shariah-compliant Investment – during the Investment Phase
Secura mobilized funds from retail investors and pooled them in to a pool of investment. This pool of investment is kept in a conventional bank under a current account, which pays zero interest. Secura issued units to investors at the face value till the Initial Closing. After the Initial Closing it charged 2% and 4% premium respectively to investors who chose to invest after the Initial Closing. Premium is allowed in Shariah, because it is an additional capital brought by investors who have invested at a later stage to share profits proportionately with their counterparts, who had invested earlier. Secura does not redeem the unit amount, if the instalment lapses. It is the Shariah rule for that.
How does Secura operate as Shariah-compliant Investment- during the Disbursement Phase
Secura does joint ventures with reputed entrepreneurs to develop commercial, residential, or retail properties in Kerala, especially in northern Kerala. It divides its funds among 4 or 5 projects to hedge the risk. Each and every step of the investment and disbursement is being monitored by TASIS ( Shariah certification firm). They do Shariah auditing every three months, it covers both, the investment and disbursement of the fund.
Secura develops JV properties which will be leased first and sold out later and it will share the profit or loss.
It does not lease its JV projects – to firms involved in
a) Manufacture, sale or distribution of alcohol, narcotic substances or tobacco products;
b) Gaming or gambling;
c) Manufacture or distribution of weapons and defence related products;
d) Production, processing, packaging, or any other business activity relating to pork or pork products and other non-halal meat products;
e) Conventional banking and investment, insurance or any other interest related financial services activity
f) The production or distribution of pornographic materials or conduct of business involving vulgar entertainment
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Secura, co-sponsor of Islamic finance conference