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The Importance of International Standards in
Managing Defaults in Islamic Finance:
Saudi Arabia and the Saad Group's Sukuk Default
By Robert J. Shapiro
In June 2009, amidst the fallout from the global financial crisis, Saudi Arabia experienced its largest financial defaults in history when two prominent, family-owned conglomerates, the Saad Group and the Algosaibi Group, were forced to restructure an estimated $20 billion in debts owed to more than 100 financial institutions around the world. Some of those debts were sukuk, financial instruments comparable to corporate bonds but structured to comply with the Sharia law.