‘Blank cheque’ companies

Siddiqui, Ahmed Ali, Nawaz, Tasawar and Virk, Nader ORCID: https://orcid.org/0000-0001-6338-2198 (2022) ‘Blank cheque’ companies. DAWN.

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Abstract

The article discusses “blank cheque” companies, or SPACs (Special Purpose Acquisition Companies), which raise funds through IPOs without identifying target firms. While SPACs have surged globally, Pakistan’s SECP allowed their formation in 2021 but lacks Sharia-compliant regulatory provisions. This raises concerns, as SPAC structures involve uncertainty (gharar) and possible interest (riba), conflicting with Islamic finance principles. The article urges SECP to introduce Sharia-compliant SPAC regulations, including screening criteria for target firms, Sharia-based escrow investment rules, and proper governance frameworks. Aligning SPAC regulations with Islamic norms is essential as Pakistan aims to transition toward a fully Islamic financial system by 2027.