Skip to main content

Omar Kalair, CEO of UM Financial, is seen here at the Islamic Finance conference at the Four Seasons Hotel in Toronto.

Tim Fraser/The Globe and Mail/Tim Fraser/The Globe and Mail

Omar Kalair is known as Toronto's trailblazing Islamic financier, an entrepreneur whose life's calling is to give loans to Muslims.

His creditors, however, want to know who he's been calling, and who's been calling him. On Friday an Ontario Superior Court judge ordered that he release his phone records to the creditors, hoping the information might help pinpoint what happened to 27 gold bars Mr. Kalair bought just as his mortgages-for-Muslims business crumbled.

Nearly $2-million in gold, stakes in more than 160 homes, and perhaps the reputation of Canada's emerging "shariah-compliant" loan industry are on the line in a sensational Toronto court case. At the crux of the issue is the emergence of Islamic financing in Canada.

Story continues below advertisement

A small percentage of the country's one-million-strong Muslim population believes The Koran forbids them taking part in any kind of interest-bearing deal. Since big banks are off limits, they turn to lenders who specialize in workarounds.

Mississauga-born Omar Kalair started selling "shariah-compliant" loans in 2004 and painstakingly built his brand, UM Financial Inc. The company used what's been dubbed as a "declining-balance co-ownership program" where it teamed up with clients to buy homes, something like a lease-to-own plan where it charged them monthly "utility fees," but not interest.

But behind the company's public face were some unconventional private transactions, one of which is said to have gone down right before UM Financial failed last fall.

According to court documents, on Oct. 4., Mr. Kalair says he was in a parking lot in Toronto's west end at night, handing over nearly $2-million worth of recently purchased gold bars to a Muslim shopkeeper he didn't know very well.

Mr. Kalair later told his creditors that a "shariah-ethics board" had suddenly called in a massive debt resulting from years of advice about whether his business complied with Islamic law. "It was the professional fees that were outstanding from the local scholars," he explained, according to a transcript of a court-ordered deposition.

"Make payment towards that in precious metals," Mr. Kalair says his scholars had told him, as they set up the parking-lot handover.

The religious scholars weren't the only ones calling in debts. Three days after the gold bars changed hands, he lost control of the company and its assets. For a year, his long-standing silent partner had been petitioning judges to put the entire loan business into the hands of a third party, so that it could sell everything off and recover loans made to UM Financial.

Story continues below advertisement

That silent partner was the Central 1 Credit Union of Vancouver – a conventional lender that had been bankrolling millions of dollars that Mr. Kalair's company turned into "shariah-compliant" loans. UM Financial Inc. was, essentially, a religiously blessed buffer between Mr. Kalair's interest-averse Muslim clientele and the credit union.

While fighting to retain control, Mr. Kalair filed sworn affidavits where understandings of religious edicts and secular laws blur. "The [shariah]board has released a fatwa," he told the Ontario Superior Court, arguing a religious ruling kept his clients from making mortgage payments to any secular entity.

Once they got to look at the ledgers, creditors grew far more worried about the gold. They discovered Mr. Kalair began buying bullion in the weeks before he lost control of the company. Several judges have since ordered that the creditors be given the gold. The problem is that the creditors can't find it.

In court-ordered depositions, Mr. Kalair and one of his religious advisers, named Mufti Yusuf Panchbaya, have insisted they have no longer know where the gold is. The creditors have been told that a middleman, a Toronto shopkeeper named Joseph Adam, took off with it to Egypt and gave it to certain theologians. Mr. Adam is scheduled to attend a deposition in Toronto on Tuesday.

On Friday, the creditors got a new judicial order – one allowing them to seize the phone records of the three men, who are all said to have been calling one another as the gold changed hands. The hope is the call logs might help creditors finally pinpoint the whereabouts of the gold bars.

Declining interview requests, Mr. Kalair sent e-mails to The Globe saying that he has never broken any laws and that he'll divulge the "the true, full story" of UM Financial Inc. once court proceedings end.

Story continues below advertisement

In the meantime, he is still in the loan business, continuing to operate under the auspices of distinct corporations called the UM Financial Group Corporation and UM Real Estate Investment.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies