CASE NO. 6149/2015
IN THE KWAZULU-NATAL HIGH COURT, DURBAN
In the matter between Albaraka Bank Limited (Plaintiff)
Feroze Sheik (Defendant)
(In this matter there are six Defendants
THE HARAAM RIBA SHENANIGANS OF ALBARAKA BANK
Albaraka Bank has issued a High Court summons against Feroze Sheik and Others of Durban, claiming payment of R966,355. Feroze Sheik is defending the matter, denying that he and the other five defendants are indebted to the bank for the amount claimed.
The background history
Feroze owned a property at 153 Alpine Road, Durban. He required finance and approached Albaraka Bank for a loan. To halaalize the riba loan, Albaraka presented the baatil “Diminishing Musharaka” model which has been fabricated by some scholars for dollars specifically to halaalize riba loans given to clients.
According to the baatil diminishing musharaka concept, the bank buys a share of the property thereby becoming co-owner/partner with the original owner who seeks the loan. In terms of this baatil model, the client (the original owner) pays a monthly rental for occupying the Bank’s share of the property. In addition to the leasing agreement, is a haraam baatil ‘buy back’ purchase agreement by which the client (the original owner) has to incumbently buy back a percentage of the Bank’s share on a monthly basis.