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Old 08-06-2012, 08:26 AM   #35
Anaedilla

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Oct 2005
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و عليكم السلام و رحمة الله و بركاته و مغفرته

بسم الله الرمن الرحيم

Mufti Ebrahim Desai said that the arguments provided by Mufti Taqi were incomplete and by Mufti Taqi's own words further research is necessary on this topic, therefore it is clear that it was not a fatwa detailing it's permissibility and more research was needed before a conclusion could be drawn. Nevertheless, I am intrigued. I am not an alim, so I won't even attempt to debate, but for my own curiosity I would like to ask a few questions and maybe the aalim's of this forum can contribute or I can go ask someone else.

1) How is the concept of a limited liability corporation legal in Shariah? It clearly contradicts many hadeeths by the Prophet SAW which clearly state that profit without risk is Haraam, and profit is in proportion to risk. The risk of a shareholder is capped at their investment into the company, whereas their profit is unlimited. Hence, if the company is to be wound up, the shareholders can walk away without any of their assets being touched. As a result the shareholders have a partial risk and do not bear the full force of the risk. Neither do the directors. This results in bigger risks being undertaken without care for the consequences and results in creditors being extremely vulnerable.

2). How is a share entitled to dividends in a company despite that fact that it owns none of the company? Or despite that a shareholder does no work for the company? Or the fact that a member of a company does not bear the full risk? It violates all the ways halaal profit can be made.



With all due respect, that entire paragraph is meaningless. The entire world could be on baatil but that does not make the baatil haq nor the haq baatil. For example, the majority of the world is not Muslim, that does not make them correct.

Regarding a difference of opinion, I think I wrote about that somewhere in the previous page. You have talked about Mufti Taqi and his respected father. If they provide good evidence for permitting shares then I guess we can say there is a valid difference. But until then merely saying there is a difference of opinion is not enough. This was also discussed in the discussion. I assume you have just forgotten as these points you raised in this paragraph were dealt with in much detail. Until valid evidence can be provided it is not enough to say there is a difference of opinion.

Again I am not a scholar. I am merely interested in why you disagree with the impermissibility of shares. I look forward to your reply and will try and research into the matter.
I do not have time to respond to your shallow arguments but I to let you know how much information you are missing I will say a little bit:

1) Mufti Taqi Usmani said more research is needed in the book Introduction to Islamic Finance. This was one of his earlier works and does not have the full research - agreed. However his opinions on this matter were finalized over time and he chaired the AAOIFI board, and the his opinions have now been formalized with conditions for the permissibility of investing in stocks. So Mufti Ebrahim Desai saheb cannot quote him on that. Moulana Taha Karaan told a ulema gathering in Toronto not to rely heavily on Islamic Finance book because this was his earlier book. Many ulema have given their final opinions that it is permissible.

2) Mufti Taqi saheb is a mujaddid and a mujtahid. I dare you to say his opinion will not constitute a "valid" difference of opinion.

3) I want to ask you - in Islam - does a silent partner have full liability or limited liability? The rabbul maal in mudarabah - does he have full liability or limited liability?

Your writing is so contradictory. You are saying how can a share be eligible for dividends when it owns none of the company. You fail to realize that because it is entitled to dividends it shows ownership. Because a share can appoint the board of directors which can direct and control the corporation's assets, that shows ownership. Contrary to your belief that a company can just wind up and leave - in that case the board of directors can be sued - where it can be proven they were negligent or acted fraudulently. The CEO and other executives of Enron and other multinational corporations are in jail and there is class action lawsuit against them to recover money which was not recovered from the corporation.

It is unfathomable to think that millions of shareholders who are not involved in the day to day operations of the company can be sued for their personal assets for the actions of managers of the corporation.

Mufti Taqi and the AAOIFI board has provided valid opinions. These scholars are not on baatil just because you disagree with them. If you want to know their opinion read the AAOIFI standards or contact them. I respect Mufti Ebrahim Desai's opinion but I disagree with him and I find Mufti Taqi's opinion much more reasonable.

Brother I am not going to spend my time debating and discussing with every single person. There are answers all over the internet if you are interested.
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