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Resolutions of Iftaa' Board


Resolutions of Iftaa' Board

Resolution No.(271): "Ruling on Holding Shares in Companies whose Business is a Mixture of Lawful and Unlawful Transactions"

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

What is the ruling on someone who possesses cash reaching the niṣāb (minimum threshold liable for zakah), and then uses part of it to purchase gold before the ḥawl (lunar year) is complete — must he pay zakāh on all of it [combined], or only on the remaining cash, excluding the gold?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
Gold acquired for hoarding and saving is subject to zakāh once it reaches the niṣāb (minimum threshold liable for Zakah) — when combined with any cash held — and once a full ḥawl (lunar year) has elapsed over it. The starting point for calculating this ḥawl is the ḥawl of the paper currency [used to purchase it], which had already reached the niṣāb and was then used to purchase the gold.
It is stated in Mughnī al-Muḥtāj (Vol.2/p.78): "As for someone who sells silver in exchange for gold, or vice versa, zakāh remains obligatory upon it, since he builds [the calculation of] its ḥawl upon [the ḥawl established at the time of] the original transaction [i.e., when the wealth was first acquired]."
This has already been explained in detail in Fatwa No. 2670 — please refer to it.
And Allah, the Exalted, knows best.

Is it Sunnah to cook the meat of the 'aqīqah?

All praise is due to Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
It is Sunnah not to distribute the meat of the 'aqīqah raw. Rather, it is recommended to cook it with something sweet — such as raisins or honey — as a good omen and expression of hope for the sweetness of the newborn's character and conduct throughout their life. And Allah Almighty knows best.

What is the ruling of Islamic Law on participating in the prize draws (raffles) that commercial stores hold for their customers?

Praise be to Allah, and peace and blessings upon our master, the Messenger of Allah.
There is no objection to participating in the prize draws (raffles) that commercial stores hold for their customers, provided that the buyer's intention in purchasing is not merely to enter the competition without any need for what is bought — rather, the purchase must be genuinely intended for the item itself, and one must not pay more than the item's fair market price. This is because paying an amount above the market price would effectively be paying a fee to enter the prize draw, which would render it a form of gambling (qimār).
These prizes are, in essence, gifts that businesses offer through a random drawing (qur'ah) to those who purchase from them, as a means of encouraging sales, without the customer bearing any additional monetary cost for participation. So long as the aforementioned conditions are met, there is no objection to benefiting from the prize offered by the store, as it is considered a lawful prize from the viewpoint of Islamic Law.
It is stated in the resolutions of the "Jordanian Iftaa' Board" (Resolution No. 47), in the context of outlining the conditions for permissible prizes: "The price of the ticket [or item purchased] for the sake of the prize must not exceed its original price, so that there is no payment of money in exchange for participation in the draw." And Allah, the Most High, knows best.

Is it permissible to fast the six days of Shawwal before making up for the missed fasts of Ramadan?

● If a person missed fasts due to a valid excuse, they may fast the six days of Shawwal before making up for Ramadan fasts, because qada (makeup fasts) in this case can be delayed, while the six days of Shawwal must be observed within Shawwal.
● However, if a person missed fasts without a valid excuse, they must make up for the missed fasts immediately after Eid, before fasting the six days of Shawwal. If they fast the six days first, it is valid, but they must still make up for the missed Ramadan fasts afterward.
It is also permissible to combine the intention of qada (makeup fasts) and the six days of Shawwal in one fast. However, it is better to fast them separately, as this increases the reward and avoids scholarly disagreement regarding combining intentions.

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