With this scheme in operation, investors who prefer to avoid interest or Riba can now limit their investments to shares from a basket of Shari’ah compliant companies.
Former Colombo Stock Exchange (CSE) and Finance Commission Chairman Ajit de S. Jayaratne, Business Leader Dian Gomes and Oxford-educated Wealth Manager Arosha Gunasekera are the founders of Innovest Investment Management Ltd. The move keeps with the core principle of Innovest to serve all clients with equal respect. Innovest will manage client portfolios for a stipulated duration with all investment decisions taken in consultation with the Investment Committee.
The basic precept in this investment plan is that one can buy and sell shares subject to the condition that the company is undertaking a Halal business. If the major business of any company is not against Shari’ah, its shares can be purchased: provided the part of income representing interest is given to charity. Among other things, preference shares with a fixed percentage of dividends, do not fulfil the principles of Shari’ah.
The basic principle of distribution of profit is that no gain can be had without undertaking to bear the risk of loss. Secondary market trading in shares that represent the underlying assets is permissible only as long as real assets and services constitute the majority of the total assets. If the capital is in liquid form, the shares may be sold only at face value, otherwise it would mean that money is being exchanged for more money which amounts to Riba.
With a corporate culture that revolves around ethical principles, Innovest will be employing an equitable service strategy even to this segment of investors with a strong emphasis on performance-based commission as opposed to a per transaction basis which generates commission regardless of the accuracy of the advice given.
The company is a registered Market Intermediary with the Capital Markets Regulator, the Securities and Exchange Commission (SEC) of Sri Lanka.