Indian court rejects state-run shariah-based venture cap fund

While it creeps in the U.S., AIG, Freddie Mac, and Minnesota Housing, India gets it right. Via Kerala HC says no to Shariah-based venture capital fund:

Acting on a public interest litigation filed by former Union minister Subramaniam Swamy, the Kerala High Court on Tuesday prevented the state government from operating Shariah-based venture capital fund (VCF). The petitioner pointed out that such an Islamic financial entity was against the tenets of secularism.

A Division Bench of Chief Justice S R Bannoormath and Justice Thottathil B Radhakrishnan issued notices to the RBI, Finance Ministry and State-owned Kerala State Industrial Development Corporation (KSIDC), which has 11 per cent stake in the venture fund registered as Al-Barka Financial Services.

The logic behind the move, initiated by the KSIDC, was to open an investment avenue mainly for Muslim entrepreneurs who were reportedly averse to an interest-based system.