Shariah Compliant Mudharabah

Shariah Compliant Mudharabah

Question:

AssalamualaikumHazrat,

This is Mufti Anwar Ali Mazahari from Trinidad.

I had spoken to you about a local investment company that wants to start a Shariah complaint investment window.   Mufti Arshad said i should email you directly.

The company Triple M Equity Investment  invest the money by importing Health and wellness products, i have vetted most of the products and they are Halal.  They then wholesale these products to local retailers and make a profit, from which dividends will be paid at specified times.   Please let me know of any other information needed.  A Musharakah system is what I suggested to them.

The company would like to have Hazrats Stamp of approval when marketing their Shariah complaint investment package.

Attached is the Shariah complaint contract i had prepared for them.  I am sending it to you for correction and your approval.

was salaam

Anwar Ali Mazahiri

Answer:

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

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Muhtaram Mufti Anwar Ali MazahariHafizakallah,

We have reviewed the attached document.  The current document does not contain any elements that are against shariah. However, there are a few additions to be made

1) It should be stipulated on the contract that all goods purchased through the investment are Halal and shariah compliant.

2) The contract must stipulate whether the Mudharib will transact with an open mandate or a closed mandate.

In an open mandate, the Rabb-ul-māl gives full freedom to the Mudhārib to act according to what normal entrepreneurs do in their line of work. A closed mandate, restricts the Mudharib to a particular business or a particular place where the Mudharib will use the capital.[i]

3) The contract only has mention of the profit distribution. It should be stipulated that all losses will be borne by the Rabb-ul-māl, unless a breach of obligations is proven against the Mudharib. In which case, the Mudharib will be liable for the loss in the Mudharabah capital.[ii]

4) The contract should stipulate that any profit realised should first be used to cover any losses incurred by the Mudharabah account. For example, if in the first quarter there was a loss of $500, and in the second quarter, the company made a profit of $1000, $500 will first be allocated to cover the loss in the Mudharabah account. The remaining $500 will be divided between the Mudharib and Rabb-ul-māl.[iii]

5) It should be stipulated that the Mudharib is not entitled to a fixed renumeration for his work in the Mudharabah. However, business related expenses such as expenses incurred during business travels, such as meals, accommodation, shall be borne by the Mudharabah account. Furthermore, wages of employees or commissions in buying in selling will be paid through the Mudharabah account.[iv]

6) Provision#3 listed in the document is ambiguous. The investment payment that will be made upon contract completion should be as follows.

All assets of the company will be liquidated. Upon liquidation, if any profit has been realised, it will be divided between both parties. Thereafter, the capital will be returned to the Rabb-ul-māl. If there is any loss, all loss will be borne by the Rabb-ul-māl.

7) The contract should stipulate that the agreement will immediately terminate if any of the parties predecease the completion of the contract.[v]

Note: In ascertaining the Shariah compliancy of an investment product, there are three preconditions:

1) The concept itself must be accepted in Shariah, for example, it is Musharakah product or Mudharabah product etc.

2) The contract must reflect the actual reality of the concept, i.e. all the preconditions (شرائط), active conditions (اركان) of the concept must be properly reflected in the contract.

3) The implementation of the product claimed as Shariah Compliant according to the terms and conditions reflected in the contract. It is one thing to have a Shariah Compliant contract and it is another to enact the product according to the contract. If the product is not enacted according to the terms and conditions of the contract, the transaction cannot be claimed as Shariah Compliant.

Alhamdulillah, you have met the first two conditions. However, the third condition requires periodical auditing from the DarulIftaa. Unfortunately, due to logistics, the third condition cannot be fulfilled. As such, the DarulIftaa cannot issue a certificate of shariah compliancy.

By the Fadhl of Allah, you are also a qualified mufti. You should use your influence over the community to present the credibility of the investment scheme. You may however contact us as and when you wish for further assistance. It will be our good fortune to assist.

And Allah Ta’āla Knows Best

Mirza-Zain Baig

Student - Darul Iftaa

Montréal, Québec, Canada

Checked and Approved by,

Mufti Ebrahim Desai.

21-06-1441| 15-02-2020

[i]

الهداية في شرح بداية المبتدي :دار احياء التراث العربي:3:201

“وإذا صحت المضاربة مطلقة جاز للمضارب أن يبيع ويشتري ويوكل ويسافر ويبضع ويودع” لإطلاق العقد والمقصود منه الاسترباح ولا يتحصل إلا بالتجارة، فينتظم العقد صنوف التجارة وما هو من صنيع التجار، والتوكيل من صنيعهم، وكذا الإبضاع والإيداع والمسافرة؛ ألا ترى أن المودع له أن يسافر فالمضارب أولى

الهداية في شرح بداية المبتدي: دار احياء التراث العربي:3:202

وإن خص له رب المال التصرف في بلد بعينه أو في سلعة بعينها لم يجز له أن يتجاوزها” لأنه توكيل. وفي التخصيص فائدة فيتخصص، وكذا ليس له أن يدفعه بضاعة إلى من يخرجها من تلك البلدة لأنه لا يملك الإخراج بنفسه فلا يملك تفويضه إلى غيره.

مختصر القدوري :دار احياء التراث العربي:113

فإذا صحت المضاربة مطلقة جاز للمضارب أن يشتري ويبيع ويسافر ويبضع ويوكل وليس له أن يدفع المال مضاربة إلا أن يأذن له رب المال في ذلك

وإن خص له رب المال التصرف في بلد بعينه أو في سلعة بعينها لم يجز له أن يتجاوز ذلك

تحفة الفقهاء:دار الكتب العلمية:3:19

ثمَّ هِيَ نَوْعَانِ مُطلقَة وخاصة

أما الْمُطلقَة فَأن يدْفع المَال إِلَى رجل وَيَقُول دفعت هَذَا المَال إِلَيْك مُضَارَبَة على أَن الرِّبْح بَيْننَا نِصْفَانِ

وَأما الْخَاصَّة فَأن يدْفع إِلَيْهِ ألف دِرْهَم مُضَارَبَة على أَن يعْمل بهَا فِي

[ii]

مختصر القدوري:دار الكتب العلمية:114

وما هلك من مال المضاربة فهو من الربح دون رأس المال فإن زاد الهالك على الربح فلا ضمان على المضارب فيه

عيون المسائل للسمرقندي الحنفي:مطبعة اسعد:396

قَالَ الْفَقِيْهُ: وقد ذكر في المبسوط أنه لو هلك فلا ضمان عليه، ولم يذكر اختلافاً

[iii]

مختصر القدوري:دار الكتب العلمية:114

وما هلك من مال المضاربة فهو من الربح دون رأس المال فإن زاد الهالك على الربح فلا ضمان على المضارب فيه وإن كانا قد اقتسما الربح والمضاربة بحالها ثم هلك المال أو بعضه ترادا الربح حتى يستوفي رب المال رأس المال فإن فضل بشيء كان بينهما

الدر المختار شرح تنوير الأبصار وجامع البحار:دار الكتب العلمية:548

(وما هلك من مال المضاربة يصرف إلى الربح) لانه تبع (فإن زاد الهالك على الربح لم يضمن)

[iv]

التجريد للقدوري: دار السلام: 7:3515

نفقة المضارب في السفر

قال أصحابنا: إذا سافر المضارب فنفقته في مال المضاربة

كنز الدقائق: دار البشائر إسلامية:528

فإن سافر فطعامه وشرابه وكسوته وركوبه في مال المضاربة

[v]

مختصر القدوري: دار الكتب العلمية:114

وإذا مات رب المال أو المضارب بطلت المضاربة

درر الحكام شرح غرر الأحكام: دار احياء الكتب العربية:2:315

(تبطل) أي المضاربة (بموت أحدهما) أي المالك والمضارب لأنها توكيل وموت الوكيل أو الموكل يبطل الوكالة

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