The IILM, backed by the central banks of nine countries as well as the Jeddah-based Islamic Development Bank, was founded in October 2010 to help develop cross-border markets in Islamic financial instruments.
The changes to the sharia board, which monitors the IILM's activities and instruments to ensure that they follow Islamic principles, could indicate further delays to the body's plan to begin issuing sukuk.
The IILM announced in April that it aimed to make an initial issue worth up to $500 million in the second quarter of this year but has not yet proceeded with the plan, and it has not given a new time frame for it.
The body did not issue a statement on the changes to its sharia board, which were merely listed on the personnel section of its website. It did not respond to Reuters questions about the changes. According to a December 2010 press release, the sharia board members were to serve three-year terms.
Two Saudi scholars are no longer listed as members of the IILM sharia board, including Mohamed Ali Elgari, a prominent expert who sits on over 80 sharia boards around the world. Elgari's office did not respond to Reuters questions.
Ahmed Ali Abdalla Hamad is the other Saudi scholar no longer listed; he serves as vice-chairman on the sharia board of Saudi Arabia's Al Rajhi Banking Corp, the world's largest Islamic bank by assets.
The departures also include Qatari-born Waleed Bin Hady Al Mullah, chairman of the sharia boards of Qatar Islamic Bank and Masraf Al Rayan, two of the Gulf Arab state's largest Islamic lenders.
Of the original members of the IILM's sharia board, formed in 2010, only two scholars from Nigeria and Malaysia remain. They have now been joined by scholars from Indonesia and Kuwait; currently the board consists of four members (here).
It is unclear exactly when the reshuffle occurred, but Indonesian scholar Cecep Hakim's profile on LinkedIn, an online service for business networking, shows he left the sharia board in April this year, roughly coinciding with Saudi Arabia's exit from the IILM.
The IILM's internal sharia coordinator, Edib Smolo from Bosnia, left the body in March this year, according to his LinkedIn profile. He declined to comment. The sharia coordinator does not sit on the sharia board but works with it to design and structure transactions, do research and perform other tasks.
The planned sukuk issue by the IILM would be part of a programme that could eventually expand to $3 billion, and would be a major step in developing Islamic finance globally; it aims to address a shortage of liquid, investment-grade instruments which Islamic banks can trade across borders.
The IILM has not explained why it has taken so long since 2010 to develop the sukuk programme. People familiar with the body have said it has encountered complex issues involving regulation in various jurisdictions and the choice of assets to back the sukuk.
Current shareholders in the IILM are the central banks and monetary agencies of Indonesia, Kuwait, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Turkey and the United Arab Emirates, as well as the IDB, according to its website.