Dealing in shares in certain companies

15-2-2005 | IslamWeb

Question:

Dealing in shares as I know is permissible in Shariah. But if a company has raised it capital from debt also, apart from equity, then it means that it will pay interest also on its debt. Is it permissible to have shares of such company which operates using debt money also?

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

The Islamic legislation urged Muslims to seek lawful income and warned them against consuming ill-gotten money. Allaah says (which means): {... eat from the good [i.e. lawful] things which We have provided for you. ....}[2:172]. Furthermore, it is confirmed that "The Prophet mentioned (the case of) a man who had travelled a long distance, was unkempt and dusty, and raised his hands towards the heavens and supplicated: 'O Lord!' 'O Lord!', while his food is ill-gotten, his drink is ill-gotten, his clothing is ill-gotten and he is fed from ill-gotten money; then his prayers would never be answered?"[Muslim] So, if this company deals with usury and/or interest, either in borrowing or loaning, then it is not permissible to invest in it as this is helping in sin and transgression. Allaah says (which means): {Help you one another in virtue, righteousness and piety but do not help one another in sin and transgression.}[5:2].

Allaah knows best.