ISLAMABAD - The Securities and Exchange Commission of Pakistan (SECP) has issued authorisation to Eman Management Pvt Ltd (EMPL) to float Orient Rental Modaraba, having capital of Rs500 million.

This is the second successive authorisation by the SECP in the current month to float a modaraba, which shows the growing interest of prospective investors in Islamic finance especially in the modaraba sector.

The new modaraba will engage in providing rental equipment solutions, operations and maintenance services to its customers on ijarah basis. The equipment selected for rental will include a fleet of power generation equipment, commercial vehicles, material handling equipment and construction machinery. All the business transactions of the Orient Rental Modaraba will be in conformity with Shari’ah and based on the principles of risk and profit sharing.

The proposed paid-up fund of Orient Rental Modaraba will be Rs500 million, out of which modaraba certificates of Rs350 million will be subscribed by EMPL, ASJN Holdings Pvt Ltd, sponsors and associates while remaining certificates worth Rs150 million shall be offered to the public. The certificates of the modaraba will be listed on the Pakistan Stock Exchange.

Earlier, in terms of Section 10 of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, the federal government’s constituted Religious Board had cleared and certified that the proposed business of the modaraba specified in its prospectus is not opposed to the injunctions of Islam.

It is expected that addition of Orient Rental Modaraba in the Non-Banking Finance sector would contribute in promoting business in conformity with the Islamic injunctions and provide further opportunities to the public to invest in Islamic financial institutions in the country.