An entity set up by Johor’s state-owned a public sector conglomerate Johor Corporation which is Waqaf An-Nur Corporation (WANCorp), to manage the assets and shares it endows, had launched the Waqaf Shares of Larkin Sentral by offering Waqf shares through an Initial Public Offering (IPO) in the interest of to be utilized to finance the upgrading and overhaul of Larkin Sentral followed with its adjacent market as well as the acquisition of land for the construction of a multi-storey car park. This great innovation and brilliant idea in enhancing their corporate image in terms of Social Corporate Responsibility (CSR) claimed to be the world’s first public offering of Waqf Share and also a good indicator for the global Islamic finance industry to explore waqf segment widely.
A total of RM85 million new share is introduced involving 850 million units share which is offered at RM0.10 per unit, but with a minimum of RM100 or a thousand units share to subscribe this waqf share. The lower cost per unit of share and kindly RM100 minimum to subscribe this waqf share are actually opening a door for average income people or maybe poor people to grab this opportunity to have experience in contributing to the ummah in form of Waqf Share.
The target market for this waqf share is meant for the public, whether individual or institution can subscribe this share. Non-Muslim also can participate as donor as a part of the contribution to social welfare. For individual who is endowing these shares, they will receive incentives for income tax deduction up to 7%, while the institutions will be eligible for tax deduction of up to 10 percent of aggregate income. On the other hand, in Larkin Sentral Waqf is registered at the Securities Commission Malaysia (SC) concerning all of the offering process, management, and reporting of the waqf funds will be systematized, professional and in a transparent manner. Then, Shariah Advisory Council of the Securities Commission Malaysia (SC) also has classified this share as Shariah-compliant securities.
The proceeds to be derived from this offering is intended to be used in the following order and priority which are first, upgrading and modifying wet markets and secondly, improving and overhaul of transport terminals. Third is enlarging the bazaars and shop lots while the fourth is payment of consultant fees in connection with the upgrading and repairing of Larkin Sentral as well as the fifth, repayment of financing in relation to the upgrading and modification of the wet market and transport terminals. The sixth, purchasing a land and lastly, the development of 7 levels of the parking lot on the land.
In offering this Waqf share, the four pillars as required under Shariah need to be fulfilled which is first, the subscriber to the shares issued is the wakif while the share itself known as the maukuf or the endowed assets. Then, WAN Corp is recognized as the immediate beneficiary, while the ultimate beneficiaries are actually a larger community who will enjoy the benefit from the enhanced and upgraded facilities, inclusive of low-income small traders and single-mother groups who lease and being the tenants of the shops in the Larkin Sentral complex. On the other side, WAN Corp will also act on the behalf of waqif as agent (wakil) to execute the hujjah waqf or declaration to form waqf. According to Malaysian laws, the nazir or trustee-manager for all waqf or endowed assets is the concerned State Islamic Religious Council – the MAIJ in the state of Johor. MAIJ delegates the responsibility of actual management of assets by appointing WAN Corp as Special Administrator of the Waqf (Nazir Khas).
WAQF BENEFIT FOR WHOM:
Distributing 90% of the dividends received by WANCorp to the project-sponsor, Larkin Sentral is for reinvestment activities and charitable purposes where in reinvestment case, the commuters who use the enhanced and improved facilities are the ultimate beneficiaries while in case of charitable purposes, the ultimate beneficiaries will be the low-income small traders and single-mother groups who may find difficulties in paying shops rentals at market rates due to adverse business conditions.
Then, the remaining 10% dividends received by WAN Corp will be passed to MAIJ which will be retained 5% by MAIJ as the sole trustee of waqf in the State of Johor in accordance with Section 89 of the Administration Enactment Islamic Religion, 2003 and the other 5% will be channeled for charitable activities involving education, entrepreneurship and health sectors.
As request by WANCorp, the dividends received from the waqf shares that is allocated for charitable purposes are aimed firstly to charge a reasonable rental rates with a minimum of 10% of normal market rental rates for selected tenants at Larkin Sentral, but excludes tenants with a steady business (subject to good performance in the form of timely rental payments) and
secondly imposing a minimum rental rate for small shop lots built in Larkin Sentral for single mothers and low-income groups (which may charge at least half of the market rates per k.p.s).