Resolutions of Iftaa' Board



Resolutions of Iftaa' Board

Date Added : 25-02-2020

Resolution No.(271)(2/2019), By The Board of Iftaa', Researches and Islamic Studies:

"Ruling on Holding Shares in Companies whose Business is a Mixture of Lawful and Unlawful Transactions"

Date: (25/ Jumādā al-Awwal/1440 AH), corresponding to (31/1/2019)

All perfect praise be to Allah, the Lord of the Worlds, and may His Peace and Blessings be upon our Prophet Muhammad and upon all of his family and companions.

During its second session held on the above date, the Board reviewed the letter {No.611/55122/1352. Date: 22/11/2018} sent from His Excellency, Chairman of the Sharia Consultative Committee in charge of drawing up the Sharia and accounting standards for the classification of companies according to their compliance with the rules of Sharia. The letter was addressed to the Secretary General of the Iftaa` Dept. Dr. Ahmad Al-Hasanat, and it read as follows: 

I would like to bring to your kind attention the fact that the Amman Stock Exchange has formed a Sharia consultative committee to draw up the Sharia and accounting standards for the classification of companies according to their compliance with the rules of Sharia. This committee includes a number of experts in various fields of Islamic financing from both technical and Sharia perspectives. Having reviewed the resolutions of the Iftaa` Board, Fatwas of the Iftaa` Department, resolutions of the International Islamic Fiqh Academy, AAOIFI Sharia Standard No.(21) about "Stock Exchange: Shares and bonds", resolutions of Sharia supervisory councils, Dow Jones Islamic Market Index, former international experiences, in addition to several research papers and studies in this filed, the committee has drawn up a draft of the above standards, subjected them to arbitration, commented on them, and set up Sharia and accounting regulations for them. 

In light of this, we would like to stress the significance of this project and its impact on strengthening and developing the Islamic economy. This is in addition to assisting investors who have the inclination to invest in companies whose businesses comply with the principles of the tolerant Islamic Sharia, and this, eventually, will lead to strengthening and supporting the national economy. We would like you to discuss the above draft with the Iftaa` Board to deliver the ruling of Sharia on it.

After deliberating the above issue, the Board decided adopting the following Sharia standards:

First: There is no harm in dealing with the shares of companies whose declared transactions and financial statements are free of the agreed upon unlawful practices.

Second: It is prohibited to trade in the shares of companies whose core business is definitely prohibited.

Third: Companies and their boards are prohibited to deal in usury, even if the latter was a small percentage.

Fourth: As for companies with mixed transactions (lawful & unlawful) the source of their business is lawful, but they accidentally dealt in some unlawful contracts or sold unlawful items, although these aren`t their basic activities nor stipulated in their registered articles of association. This mixed type must meet two conditions in order for trading in their shares to become permissible:

1- The borrowed or deposited amounts, involving usury, mustn't exceed 25% of the overall value of the company`s shares.

2- Revenues and expenditures resulting from that incidental unlawful transaction-as defined earlier  mustn't exceed 5% from the company`s overall revenues.

The evidence for these two conditions rests on the flexible rules of Islamic Jurisprudence. For example, "Pardoning the little", "Necessity must only be assessed and answered proportionately", and "A general need takes the ruling of a necessity." This is in addition to the rule, which states that the one who undertakes the prohibited action is the one liable for it while others are free from that liability. This particularly applies to modern companies shared by thousands of individuals. Therefore, it is hard for each shareholder to realize, in detail, the incidental transactions of that company.

It is the duty of every Muslim-despite the conditional permissibility of the above ruling-to get rid of the unlawful percentage of his profits, and to spend it on public interest. This is provided that no benefit is earned from the latter whatsoever. And Allah the Almighty Knows Best.

Chairperson of Iftaa` Board,

Grand Mufti of Jordan,

Dr. Mohammad Al-Khalayleh

Sheikh Abdulkareem AlKhasawneh/ Member

Sheikh Sa`eid Al-Hijjawi/ Member 

Prof. Abdullah Al-Fawaaz/ Member{Have a reservation on the word "Mixed"}.

Dr. Muhammad Khair Al-Issa/ Member

Dr. Majid Al-Darawsheh/ Member

Prof. Adam Noah/ Member{have a reservation on the fourth standard}.

Judge. Khaled Al-Worikat/ Member 

Dr. Ahmad Al-Hasanat/ Member

Dr. Mohammad Al-Zou`bi/ Member

 

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Summarized Fatawaa

1-A young man whose father and grandfather are dead has died leaving a mother, two sisters and a brother. Do his paternal uncles inherit him?2- A man died leaving daughters, a wife, brothers, a mother or no mother. It is well known that the daughters inherit two thirds and the wife one eighth. To whom does the rest of the estate go and what is the evidence on that from the texts of Sharia?

All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger.
1- The full brother or the paternal half-sibling disinherits the paternal uncles. The paternal half-sibling takes one sixth and because they are from the Asabah (Male relatives on the father`s side) of the deceased they take the rest of the estate. The proof of this is that Ibn ‘Abbas (May Allah Be Pleased with them) reported God’s Messenger as saying: "Give the shares to those who are entitled to them, and what remains over goes to the nearest male heir." [Agreed upon]. In this case, nothing is left to them.
2- The brothers take the rest of the deceased`s estate and the full brother disinherits the paternal half-sibling, and the proof of this is the aforementioned narration. And Allah The Almighty Knows Best.

Who should pay the Zakah(obligatory charity) from the orphan`s money?

His/her guardian, and if the latter fails to do so, then the orphan himself/herself is obliged to pay the Zakah once he/she reaches puberty, and is capable of handling his/her own affairs.

Does the wife have the right to stop her husband from visiting some of his relatives because their meetings involve religious violations?

Couples should advise one another in kindness, and the wife can stop her husband from committing sin by resorting to a kind and tactful approach.

Is it permissible to pay the Fitr Zakah(obligatory charity) of Ramadhaan on behalf of a dead person?

The Fitr Zakah of Ramadhaan isn`t due on one who had passed away before the sunset of the last day of Ramadhaan.