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TID Sukuk removed from Nasdaq Dubai trading

It was the first sukuk to be structured with a put option

Dubai: Nasdaq Dubai yesterday announced the removal of TID Global Sukuk 1 Limited from admission to trading.

The exchange said in a statement posted on its website that the security has been removed from trading with immediate effect following the Dubai Financial Service's (DFSA) announcement to delist the sukuk.

The DFSA announced its decision to delist TID Global Sukuk 1 Limited from its official list securities pursuant to Article 19 (1) of the Markets Law 2004.

Failure to comply

"The Delisting by the DFSA is due to the failure of the Reporting Entity for TID Global Sukuk 1 Limited, the Investment Dar Company K.S.C., to comply with its continuous disclosure obligations under the Markets Law 2004 and Offered Securities Rules," the DFSA said in statement posted on its website. In September 2006, TID Global Sukuk I was the first sukuk to be structured with a put option for investors and a call option for the issuer. In October 2006, TID Global Sukuk I was listed on the Dubai International Financial Exchange (now Nasdaq Dubai), marking the first Kuwaiti company to list on the DIFX and the first financial institution to list a sukuk on the exchange.

In May 1999, the Investment Dar became the first GCC-based sukuk issuer to default. The default provoked significant reaction in terms of how the Islamic finance industry would respond to sukuk defaults. Following the default the company set up a steering committee of banks and investors and to facilitate discussion between the parties.

Investment Dar said in October it completed a debt restructuring and had undertaken to pay sukuk holders between June 30, 2013 and June 30, 2017.

‘Wasn't informed'

The company was forced to restructure about 1.37 billion dinars (Dh18 billion) after missing a payment on an Islamic bond in May 2009.

The shares of Investment Dar were delisted from the Kuwait Stock Exchange by the country's Capital Markets Authority last month. The company said in mid-February that it wasn't "informed in advance" of the reasons, even after it had "fulfilled all filing requirements and submitted some weeks earlier all the relevant information" to the regulators.