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WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia 5 JUNE 2014 LE MERIDIEN JAKARTA, INDONESIA “Beyond Charity: Harnessing Waqf for Economic Prosperity”

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Presentation on theme: "WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia 5 JUNE 2014 LE MERIDIEN JAKARTA, INDONESIA “Beyond Charity: Harnessing Waqf for Economic Prosperity”"— Presentation transcript:

1 WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia 5 JUNE 2014 LE MERIDIEN JAKARTA, INDONESIA “Beyond Charity: Harnessing Waqf for Economic Prosperity”

2 Management Challenges of Awqaf Assets Role Players: Tan Sri Muhammad Ali Hashim, President, Malaysian Islamic Chamber of Commerce, Malaysia Mr. Husain Benyounis, Secretary General, Awqaf New Zealand Moderator: Mr. Riawan Amin, Chairman, Supervisory Board, Association of Islamic Bank Indonesia (ASBISINDO) WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia

3 WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia Tan Sri Muhammad Ali Hashim President Malaysian Islamic Chamber of Commerce, Malaysia

4 “ Management- challenges of - awqaf assets.” WIEF-IDB AWQAF ROUNDTABLE 5 th June, 2014, Jakarta, Indonesia

5 VISIT BY SAUDI GUESTS (11 April, 2014) -- - CORPORATE WAQF MALAYSIA: CORPORATE WAQF

6 JOHOR CORPORATION -- - Integrating waqf principles into corporate practice to reform business.

7 8 PLC, inc Kulim Malaysia Bhd, KFC Holdings,KPJ Healthcare, & New Britain Palm Oils, PNG.NBPOL listed on London StockX Group PBT 2010: RM962 mill. More than 280 cos. with more than 65,000 employees Market Cap. Dec 2010 : RM18.1 billion. Market Cap. Dec 2012 : RM20.9 billion. IMAGINE JCORP AS A WAQF ENTITY! JOHOR CORPORATION

8 INTRODUCTORY STATEMENTS: 1. “ Corporations rule the world.” 2. Private sector interests interests crowding out people’s interests everywhere! everywhere! CORPORATE waqf?WhyCORPORATE

9 “ The culture & institutions of the Wall Street economy cultivate & reward our capacity for individualistic greed, David C Korten, “Agenda For a New Economy, From Phantom Wealth To Real Wealth: Why Wall Street Can’t Be Fixed and How to Replace It.” pp 91. hubris, deceit, ruthless competition, & material excess. ”ReformingReforming Business ways WALL STREET CULTURE

10 everywhere! everywhere! INTRODUCTORY STATEMENTS: 1. “ Corporations rule the world.” 2. Private sector interests interests crowding out people’s interests to Community-centric Corporate reform REFORM Corporate Waqf Shareholder-centric Shareholder-centric Shift system away from

11 “ A study of Johor Corporation’s “ A study of Johor Corporation’s Corporate Waqf strategy.” Corporate Waqf strategy.” University of Oxford, December, “...Corporate Waqf seems to be emerging as both an innovative and effective mechanism for the functional, practical delivery of benefits in line with the principles of Waqf.”

12 Corporate Waqf Mgt challenges - Corporate Waqf benefit delivery concept - Entrepreneurship - Ownership structure

13 ANITA RODDICK - Ownership structure

14 Sold Bodyshop US$ 1.1 billion The Economist, September 15-21, 2007, “Business and society”. ANITA RODDICK to L’Oreal in 2006 = RM3.3 billion

15 Fourth richest woman in Britain ANITA RODDICK

16 KPJ Healthcare Bhd Malaysian CEO, KPJ: RM3.86 billion 82 Datin Paduka SITI SA’DIAH

17 JCorp’ s intrapreneur  Principal Bizs: 23 Specialist hospitals in Malaysia 2 Sp. Hospitals in Jakarta, Indonesia Started with 1 Hospital & 6 Specialists in Johor Bahru in 1981 D.P. Siti Sa’diah Sheikh Bakir Managing Director  1 Waqf Hospital & 21 Waqaf An-Nur clinics in 6 states in Malaysia  1 Kolej Universiti, N.S KPJ HEALTHCARE BHD Feb 2012: > 800 Specialists, >2 mill patients IPO valuation: (Nov 94) 276 mill. - Market Cap Dec 2012: - AMANAH Entrepreneur RM 3.9 Billion 2013 Sales: RM2.3 bil, PBT RM158 mill W’out privatisation, MBO or Stock Options! Integrating amanah into corporate practice

18 Intrapreneur JCorp  Bisnes utama: 23 Hospital pakar di Malaysia 2 Hospital pakar di Jakarta, Indonesia Bermula dpd 1 Hospital & 6 doktor pakar d i Johor Bahru pada 1981 D.P. Siti Sa’diah Sheikh Bakir Pengarah Urusan  1 Hospital Waqaf dan 21 Klinik Waqaf An-Nur di 6 negeri di Malaysia  1 Kolej Universiti, N.S KPJ HEALTHCARE BHD Feb 2012: > 800 Specialists, >2 juta pesakit Nilai Modal IPO: (Nov 94) 276 juta- - “Market Cap” Dis 2012: - RM 3.9 Bilion 2013 Sales: RM2.3 bil, PBT RM158 juta JIHAD BUSINESS AMANAH Entrepreneur W’out privatisation, MBO or Stock Options! KPJ shares waqfed: KPJ shares waqfed: 18.6 million (14.3%)

19  Realising “Biz Jihad” objectives Corporate Waqf’s role - Spawning business as a “Mother Corp.” - Waqaf An Nur Corp: and entrepreneurial through opportunities for all!

20 CAPAIAN ASPIRASI Sdn Bhd AMANAH Entrepreneur Ustaz Ismail Mat Ali, General Manager Ustaz Ismail Mat Ali B.A. Hons (Al Azhar U) - Shariah Islamiah GM - Minority shareholder Capaian Aspirasi Sdn Bhd Subsidiary of Waqf An Nur Corporation Waqf venture capital funding for entrepreneurs without capital

21 CAPAIAN ASPIRASI Sdn Bhd Biz: Agency (Zakat/ Loss 2006 : (RM100,000) PBT 2011: RM600,000 Dividend 2011: 400% Paid-up Capital: PBT 2010: RM511,000 Intrapreneur Ustaz Ismail Mat Ali PBT 2012: RM557,640 5 staff + 80 agents Wasiat + Mutawwif) RM100,000 (25% IMA) Intrapreneur WAQAF AN NUR CORORATION BHD AMANAH Entrepreneur

22 JOHOR CORPORATION’S CORPORATE CONCEPT An entrepreneurial corporate organisation generating sustainable businesses under leadership of (AMANAH entrepreneurs)

23 JCORP’S INTRAPRENEURS JCorp’s Intrapreneurs: Equity up to 25%. ‘TEAM INTRAPRENEURS’

24 JCorp INTRAPRENEURS offered equity up to 25%. ‘TEAM INTRAPRENEURS’ JCORP’S INTRAPRENEURS

25 JCORP JCORP’S INTRAPRENEURS : With equity up to 25%. MILLIONAIRES! 5 intrapreneurs are today JCORP’S INTRAPRENEURS

26 8 PLC, spt Kulim Malaysia Bhd, KPJ Healthcare, & New Britain Palm Oils, PNG. NBPOL tersenarai di London SX Group PBT 2010: RM962 juta Lebih 280 syarikat dan lebih 65,000 warga kerja Kumpulan KFC Holdings, Market Cap. Dec 2012 : RM21.0 billion. JIHAD BUSINESS TRANSFORM JCORP INTO WAQF

27 “CORPORATE WAQF” PLC shares NAV) 3 rd August, : + RM50 million 2006:RM 200 million CORPORATE WAQF LANDMARKS

28 Market WAQF ASSET VALUE: (Market Cap, 31 Dec 2010) RM430.4 mill Waqf Asset Value at endowment date: RM250 million WAQF ASSET VALUE: (Market Cap, 31 Dec 2012) RM575.9 mill

29 RM5 No. of Treatments ( ): 961,148 Non- Muslims: 69, CLINICS + 1 HOSPITAL (Dec 2013), in Johor, Perak, Negri Sembilan, Selangor, Sarawak and Penang. WAQAF AN-NUR CORPORATION

30 “ Management- challenges of - awqaf assets.” WIEF-IDB AWQAF ROUNDTABLE 5 th June, 2014, Jakarta, Indonesia CONCLUSION

31 CORPORATE WAQF Corporate capacity building using Islamic motivational force & spiritual energy for business-driven success; Corporate capacity building using Islamic motivational force & spiritual energy for business-driven success; Wealth-creating institution to reduce economic divides & bridge social disparities; Wealth-creating institution to reduce economic divides & bridge social disparities; A “Mother Corporation” for entrepreneur development, management talent and human capital development; A “Mother Corporation” for entrepreneur development, management talent and human capital development;

32 spawning new enterprises, spawning new enterprises, Over the long run, through critical mass, an institution that will renew economic system, Over the long run, through critical mass, an institution that will renew economic system, shifting it from one that is ‘shareholder-centric’ shifting it from one that is ‘shareholder-centric’ creating biz opportunities for marginalised groups; creating biz opportunities for marginalised groups; A “Mother Corporation” A “Mother Corporation” to a ‘community-centric’ and more equitable system. CORPORATE WAQF

33 WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia Mr. Husain Benyounis Secretary General Awqaf New Zealand

34 Simple Global Model Management Challenges of Awqaf Assets Presented by: Husain Benyounis Secretary General – Awqaf New Zealand Established in Feb 2011 & have been Run By Volunteers Turning unused charitable Resources into Awqaf Revenues Muslim Minority Prospective Islamic Economy Award 2013 Winner

35 Understanding The Basics وَأَحَلَّ اللّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا “Allah destroys interest and gives increase for charities” يَمْحَقُ اللَّهُ الرِّبَا وَيُرْبِي الصَّدَقَاتِ “But Allah has permitted trade and has forbidden interest” Trade Charity Economy Islamic  Identified a gap between the Profit & Non-Profit sectors.  Found the possible reason for this gap.  Introduced Awqaf Sukuk that links the 2 industries.  Developed a Model that Bridges this gap and Helps overcome challenges such as taxations, cross boarder relations, transparency, efficiency and Shariah compliance in one simple model based on simple fundamentals. The balance issue was well covered in Dr Sami Ibrahim Al Suwailem’s book “Entrance of Islamic Economy Fundamental” مدخل إلى أصول التمويل الإسلامي (http://suwailem.net/BooksDetails-6)http://suwailem.net/BooksDetails-6

36 Elements of Awqaf Engineering  Aim  Project  Needs  Available  Challenge  Legislation  Development  Model  Maximum utilisation of our charitable resources  Turn wasted charitable resources into Awqaf Revenues  Take Awqaf from Local to Global with minimum risks  Adahi/Qurbani of Muslims in the West (5 million Sheep/year)  Establish Awqaf farms to supply 5 million sheep a year  Waqf, Donor, issuance & beneficiary in different countries  Establish Global Awqaf Research Centre (GARC) NZ & UAE  Innovate Global Awqaf Sukuk and Awqaf Certificates New Types of Awqaf Assets Establishing Awqaf Farms and associated industries to supply $750 million/year  Livestock to the Adahi/Qurbani & Relief industries for the Muslim in the west with estimated value of $750 million/year (advance level of development). $500 million/year  Zakat Al Fattier packaged food with estimated value of $500 million/year only for the western Muslims (under early stage of development). This could also be extended to all Muslim world.

37 Proposed Model Based on Cash Waqf Project Prospectus Awqaf Certificate or Sukuk Project Prospectus Awqaf Certificate or Sukuk Approved No Amended Awqaf Bank International Awqaf Bank World Awqaf Qard Fund Services (WAQF-S) A Waqf Organisation Has a Sharia Board Has International Status Non Governmental (independent) Specialize in Qard Al Hasan & Awqaf Has the authority to Issue Awqaf Certificate & Sukuk A small amount of the Adahi/Qurbani wool is sufficient to fund the operation of WAQF-S Cash Waqf Cash Waqf Yes Name Rules Fund Name Rules Fund WAQF-S Issue the Awqaf Certificate or Sukuk Qard Hassan given to Awqaf Success Buy the asset Finish Payment Stop Sell Asset Sell Asset Yes Transfer ownership to Awqaf Org. Replicate the model somewhere else Transfer ownership to Awqaf Org. Replicate the model somewhere else No Annual Payment No Yes WAQF-S Proposed Members WAQF-S Proposed Members Revenues generated from the Wasted charitable resources continue feeding WAQF-S The wasted value of the Adahi/Qurbani wool of the Muslims in the west is estimated at $50 million/year The wasted value of the Adahi/Qurbani wool of the Muslims in the west is estimated at $50 million/year Turning bone into Halal Galatian Turning bone into Halal Galatian Ideally World Waqf Foundation Islamic Development Bank (2001) Ideally World Waqf Foundation Islamic Development Bank (2001) Awqaf South Africa (2001) Awqaf New Zealand (2011) Awkaf Australia (2012) Awqaf USA (2013) Awqaf Fiji (2013) Awqaf Canada (2014) Awqaf Muslim Minorities

38 WAQF-S “Waqf Al Sukuk” Balance the Islamic Economy Enhance efficiency of Non-Profit Sector Revive and apply the Sunnah of Qard Al Hassan Develop new Islamic Finance Tools for the Non-Profit Sector Provide secured infrastructure to globalize the Awqaf Industry Recycle the Awqaf Sukuk by replicating the model over & over Safe structure for the profit to invest in the Non-Profit Sectors Ensure high degree of transparency via Awqaf Sukuk instrument Encourage innovation through Engineering the Awqaf Industry Most importantly becoming a Communication Platform Between the Profit & Non-Profit Sectors WAQF-S not only bridge the Gap between the Profit & Non-Profit Sectors but also help develop both sectors in many ways as:

39 CONCLUSIONS We will easily & efficiently overcome the current & future Management Challenges of Waqf Assets. We are in talks with a Ministry of Awqaf to host WAQF-S. We expect to launch WAQF-S in months Insh-Allah. The Scope is Huge, The Cost is Low & The Opportunities are Endless Thank You

40 WIEF-IDB AWQAF ROUNDTABLE Jakarta, Indonesia Session End

41 Thank You, See you in Dubai! 10 th World Islamic Economic Forum October 2014 Madinat Jumeirah Conference Centre, Dubai


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