Fatwa ID: 07096

Answered by: Muftiyah Safiyya-Maryam Ahmed

Question:

If a company gives employees shares in the company but the shares are not shariah compliant due to high debt are there any solutions.

I assume it will not be permissible to benefit from just as it wouldn’t have been permissible to purchase due to the debt even though the business itself is lawful.

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

If the business itself is halal it will be permissible for the employees to take the shares in the company. If by high debt you mean that the company is borrowing money on interest, then the employee must use their right as shareholder to object to this at their annual meetings. If the company is accumulating interest, then one can ascertain from their statements what percentage of interest is part of the business’ income and then deduct that percentage from their dividend and give it to charity.

Principles of Shariah Governing Islamic Investment Funds, Conditions for Investment in Shares, By Mufti Taqi Usmani: https://www.albalagh.net/Islamic_economics/finance.shtml#Conditions

Only Allah knows best

Written by Muftiyah Safiyya-Maryam Ahmed

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham