Islamic Banking Pioneer Sheikh Saleh Kamel Dies Leaving an Influential Legacy – Obituary written by Mushtak Parker

The death of Sheikh Saleh Abdullah Kamel, the 79-year-old Chairman of Dallah Albaraka Group (DAG), on 18 May 2020 in Jeddah sees the end of an era of one of the three pioneers of the contemporary global Islamic finance movement.

The larger-than-life Sheikh Saleh, as he was affectionately known, together with Sheikh Saeed Ahmed Bin Lootah, the founder of Dubai Islamic Bank, the oldest commercial Islamic bank in the world established in 1975, and Prince Muhammed Al Faisal, the son of the late King Faisal of Saudi Arabia who launched the Dar Al Maal Al Islami (DMI) Group headquartered in Geneva, were the three pioneers of the modern Islamic banking system.

Sheikh Saleh’s influence, leadership and wisdom will be sorely missed by the industry. As the founder and Chairman of DAG, the eighth largest Saudi business conglomerate, with diverse interests in Islamic banking, finance, Takaful, public works services, transport, infrastructure, industry and media, Sheikh Saleh was passionate about applying the Islamic system of financial intermediation based on the Islamic ethical values of a proscription of riba (interest), gharar (non-disclosure and secrecy in a contract) and maisir (gambling and associated speculation).

He was attracted to this nascent phenomenon called ‘Islamic banking’ driven by a deeply-held conviction of the Shariah-based ethical values of equity-based profit-and-loss-sharing and risk sharing finance to serve the real economy, society, the greater public good and wealth creation. “In Islam,” Sheikh Saleh once reminded me, “we have all the (financial intermediation) tools. What we have to do is to convert short-term money into long-term finance and investments.”

It was Sheikh Saleh and his Albaraka Banks that set the pace by introducing Islamic banking to markets as diverse as Turkey, Lebanon, South Africa, Sudan, Tunisia, Egypt and the UK. Sheikh Saleh had the vision to tread where others from the Middle East dared not. Al Baraka Bank South Africa, in which ABG has a 64.51% equity stake, started operations in Durban in 1989. The bank stressed that Sheikh Saleh was hugely instrumental in helping lay the foundation for the bank’s formation in South Africa. In the UK, Sheikh Saleh’s Albaraka Investment Company (ABIC), the precursor holding company for DAG’s financial services entities which later became the Bahrain-incorporated Albaraka Banking Group (ABG), established Albaraka International Bank (ABIL), the first bank authorised by the Bank of England (BoE) to operate under the provisions of both the UK Banking Act and Sharia’a financial principles.

After more than a decade of operations, Sheikh Saleh opted to surrender ABIL’s licence instead of agreeing to a restructuring proposal of the BoE which would have seen his equity diluted to a mere minority stake. The BoE’s rationale then was that in the aftermath of the collapse of the Bank of Credit & Commerce International (BCCI) and Barings, new international bank ownership guidelines were imperative, essentially a move away from family-owned institutions.

It was Sheikh Saleh and his Albaraka Group that had forged strong relations with the likes of British institutions such as Kleinwort Benson, Flemings, Midland Montagu and Morgan Grenfell over the decade at a time when the Islamic banking industry was still in its infancy. Sheikh Saleh in this way contributed to London becoming the capital of Islamic finance in the West. The strength of the UK’s current Islamic finance policy is underlined by a supportive cross-party approach in the House of Commons which ensures continuity in the event of a change. It is the stated policy of successive British governments to promote Islamic banking as part of its financial inclusion policy initially, and in a post-Brexit era to attract inward Islamic investment, trade and financial flows.

Today, the UK is home to a number of fully Shariah-compliant banks, with assets totalling just under $10bn. Beyond those five, a range of conventional UK banks offer Islamic finance products and services. The UK became the first Western country to issue a 5-Year Sukuk Ijarah (leasing alternative bond) in June 2014, raising £200 million in the process. HM Treasury has already issued a tender for the UK’s second sovereign Sukuk issuance.

Sheikh Saleh had a great affection for Malaysia and was full of praise for its leadership and for their proactive policy, legislative and regulatory support in promoting Islamic banking, finance and Takaful in Malaysia. It was Bank Negara Malaysia’s former Governor Zeti who also appointed him as a Member of the Governing Council of the nascent International Centre for Education in Islamic Finance (INCEIF), the Global University for Islamic Finance Education.

Although Al Baraka never managed to get a standalone banking licence in Malaysia, it did own a 40 percent stake in the local RHB Islamic Bank through its local entity Dallah Albaraka Malaysia Holdings (DAMH), which had years earlier acquired a stake in Bank Utama, which subsequently took a controlling state in the RHB Group. DAMH had earlier divested its stake in the flagship Bank Islam Malaysia and in Southern Bank.

Perhaps it was fitting that Sheikh Saleh was the first recipient of The Royal Award for Islamic Finance (RAIF) launched in June 2010 by BNM’s Malaysia’s MIFC (Malaysia International Islamic Financial Centre) and the Securities Commission Malaysia (SC) which aims at honouring “outstanding contribution of an exceptional individual in Islamic finance”.

An ailing Saleh Kamel could not attend the award ceremony in person, but in his acceptance speech delivered on his behalf by his son Moyhiddin Saleh Kamel, he reminded that “we should also not forget the earlier initiative by the Government of Malaysia in the establishment of Lembaga Tabung Haji (the Pilgrims Management Fund), which has inspired and paved the way to the establishment of other institutions in the field of Islamic finance.” His other son, Abdullah Saleh Kamel, is the CEO of DAG, and has effectively been running the still largely-family owned business in the absence of his ailing father.

Saleh Abdullah Kamel was born and grew up in Mecca in 1941 into a middle-class family. His father was a government bureaucrat who rose to become Director of the Saudi Cabinet Office. After graduating from the King Saud University in Riyadh in business administration, he followed in his father’s footsteps in government service working at the Ministry of Finance for 10 years before deciding to go into business.

The need and opportunities of homegrown companies to build roads, highways, ports and cities for the developing Kingdom presented a meteoric pathway for his nascent Dallah Works & Maintenance Co in 1969, which only a few years later metamorphosised into DAG. The subsequent sudden oil wealth thanks to the shock oil price rise in 1973 provided the ideal catalyst. Today the Group employs tens of thousands of people in several countries and Sheikh Saleh’s personal net worth was estimated at $2.5bn.

At the time of his death, the industry has proliferated to an estimated AUM by Standard & Poor’s at $2.3 trillion. At one stage, however, Sheikh Saleh had become so disillusioned with the lack of progress in the Islamic finance sector that he famously said that if he had to start again, he would not get involved in Islamic banking, as he doubted if Islamic banking had achieved a qualitative breakthrough. Islamic finance, he explained, differs in its mechanism and more importantly in its spirit and philosophy from conventional finance. The problem he identified was the perception that the two systems are more-or-less the same.

As a philanthropist, his vision transcended corporate social responsibility (CSR) and mere giving to charities, NGOs and the like. In 2010 he gave a $10m endowment to Yale Law School to establish the Abdallah S. Kamel Centre for the Study of Islamic Law and Civilization. Sheikh Saleh had long been an advocate of institutionalising Zakat (one of the five pillars if Islam) to unleash its full potential for the benefit of Muslim and other communities the world over. He strongly rejected any suggestion by some Shariah scholars that Zakat is merely a payment to the poor, but equally strongly urged its utility in funding education, training, tourism etc.

During his career, Saleh Kamel had his ups and downs. The proposed merger between ABG and The International Investor of Kuwait failed to materialise which resulted in a legal dispute that was eventually settled out of court. His initiative for the establishment of a multinational multi-billion dollar “mega Islamic bank” called Bank Al-Emaar, to take on the Western banking majors, never saw the light of day.

How fitting that “the boy from Makkah” was laid to rest in the very city of his birthplace and of course Islam’s holiest city, and how generous of the authorities of the Grand Mosque, the Masjid Al-Haram, which houses the Kaaba, Islam’s holiest site, to allow his family to hold his Janazah (funeral prayers) at the mosque, which has been closed to visitors amid the Coronavirus-19 pandemic. The fact that this was allowed perhaps reflects Saleh Kamel’s prominence and stature in Saudi Arabia.

Sheikh Saleh Abdullah Kamel 

Born Mecca 1941

Died Jeddah 18 May 2020

He is survived by his widow Safa Abul Saud, three daughters and two son

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