Indian Court Delays Start of Shariah-Compliant Investment Company

In India yesterday, the Kerala High Court ordered the Kerala government not to start operations of a proposed Islamic investment company in which the Kerala State Industrial Development Commission would hold 11% ownership. The company is to issue Shariah compliant investment products. Qatar's Peninsula and India's Economic Times today report that the temporary order was issued to permit the court to hear a challenge to the company filed by Janata Party leader Dr. Subramanian Swamy. His complaint argues that government participation in compliance with Shariah amounts to the State Government favoring a particular religion in violation of Articles 14 and 25 of the Indian Constitution. The CEO of the proposed company is required to report to the Shariah Advisory Board. The complaint argues that this means the Board will have some measure of supervision over the proposed company. The complaint also alleges that the proposed investment company violates the Banking Regulation Act of 1949.