Court begins hearing Islamic bank dispute
The financial dispute between an Islamic bank and about 200 families whose mortgages are in limbo, moved to a Toronto courtroom on Thursday.
The homeowners had interest-free mortgages with United Muslim Financial totalling about $32 million.
Since 2005, UM Financial has offered loans and mortgages to people who want to adhere strictly to Islamic (Shariah) law, under which no interest can be charged on a loan.
The court will now decide what to do with those mortgages.
UM Financial was ordered into receivership on Oct. 7.
"At this time our main focus is to work with all stakeholders to ensure that the legal and moral interests of the families affected by this case are protected," said Afroz Kapadia, spokesperson for the group United Muslim Homeowners.
The court-appointed receiver, Grant Thornton Limited, says it is facing challenges getting key documents from Omar Kalair, the head of UM Financial.
The receiver claims UM Financial, "purchased $2.1 million of precious metals (silver and gold) in the weeks leading up to the receivership order" and that "proceeds of approximately $2.1 million were paid to UM Financial's Shariah board."
The receiver also claims "Omar Kalair has failed to disclose the location of assets."
Muhammad Heft — one of the homeowners — sat through the hearing, also convinced UM Financial isn't being upfront.
"In our community we have to have the highest standard of ethics and Shariah banking is not just a document it's a behaviour, it's a communication, it's an organization of a company and I think this one failed miserably," he said.
The lawyer representing Omar Kalair said his client won't be making any statements to the media.