x

Abu Dhabi, UAEWednesday 19 December 2018

Council approves more oversight of Dh3 billion worth of endowment assets

Draft law proposes harsher penalties for negligence and fraud

A new draft law stipulates harsh penalties for those who fail to safeguard endowment assets.

The draft law passed by the Federal National Council on Wednesday seeks to impose a Dh50 000 fine or at least one year in jail, whether the loss of assets was through negligence or fraud.

The law also vests oversight for all endowments in the UAE Authority of Islamic Affairs and Endowment.

Dr Mohammed Al Kaabi, head of the authority, noted the need for a comprehensive law regulating endowments given that there are Dh3 billion worth of endowment assets in the country.

Assets include 1,431 buildings, 1,867 shops, 1,300 apartments and 76 plots of agricultural land, a site allocated to build a petrol station, 140 cars, and 14 villas.

There are also endowments in the form of stocks in the Abu Dhabi and Dubai financial markets.

“Etisalat has one million such stocks, and Abu Dhabi Islamic Bank has 27,000, and Dubai Financial Market just finished offering 10,000 stocks," said Dr Al Kaabi.

Additionally, rentals from 4,000 properties also go to endowments.

“The goal behind this law, which has spent three years in the making, is to encourage more people to offer endowments, because now they will feel secure that there is a governing body who will make sure their endowment money is going to the right place,” added Dr Al Kaabi.

Members of the council did raise concern about a clause stipulating that a permanent endowment - such as mosques, graveyards, and anything specified as such - cannot be withdrawn even if the benefactor faces a financial crisis. Member Marwan bin Ghalita said the draft law allows the benefactor of a temporary endowment to withdraw his offering if he faces financial issues that could put him in jail; “so why not apply that to permanent endowments as well?”

But Dr Al Kaabi said one of the preconditions before accepting an endowment from an individual was that he should not be in debt and not having any legal trouble. And that if a benefactor did start to have “a minor financial problem, we should not deprive the beneficiaries of that offering which he initially offered for life.”