The ruling on selling the shares of an insurance company for a profit
Machine translationRead the Arabic original
Question:
In his second question, he says: Your Eminence the Shaykh, what is your view (may Allah preserve him) regarding an insurance company that has offered shares to the people, and many have invested in it? This company has not yet started operations and has not distributed any profits. Some people have learned that insurance is forbidden, so some of them want to sell their shares. The price of this share has risen threefold. If they sell these shares, which have not yet started operating, for a profit, is this profit lawful or forbidden? Please inform us. May Allah reward you with good.
Answer:
This requires a detailed explanation and study. If the insurance company has a known shared portion with them, where they give it money and it trades, giving them a known shared portion, such as half or a third, where each person who gives it money—this one gives it a thousand, this one gives it ten thousand, and this one gives it a hundred thousand—or if it works and its workers work and give the partner half of the profit or a third of the profit, then this is a mudarabah (profit-sharing partnership) and there is nothing wrong with it. However, if it is something unknown, where they do not know what they are giving, or whether they will lose or profit, that is not valid. They must agree on a known amount, because this requires a detailed explanation. If they give the company the money, the company must work and it must give them a shared portion, such as a quarter, a fifth, a sixth, a tenth, or half of the profit, with the remainder for the worker. It cannot be an unknown amount, that is not valid. Nor can it be a fixed sum of money, that is not valid. It must be a shared portion, where the worker works and the profit is divided between them in thirds, quarters, or fifths. These are lawful companies.
The presenter:
May Allah reward you with good,
In his second question, he says: Your Eminence the Shaykh, what is your view (may Allah preserve him) regarding an insurance company that has offered shares to the people, and many have invested in it? This company has not yet started operations and has not distributed any profits. Some people have learned that insurance is forbidden, so some of them want to sell their shares. The price of this share has risen threefold. If they sell these shares, which have not yet started operating, for a profit, is this profit lawful or forbidden? Please inform us. May Allah reward you with good.
Answer:
This requires a detailed explanation and study. If the insurance company has a known shared portion with them, where they give it money and it trades, giving them a known shared portion, such as half or a third, where each person who gives it money—this one gives it a thousand, this one gives it ten thousand, and this one gives it a hundred thousand—or if it works and its workers work and give the partner half of the profit or a third of the profit, then this is a mudarabah (profit-sharing partnership) and there is nothing wrong with it. However, if it is something unknown, where they do not know what they are giving, or whether they will lose or profit, that is not valid. They must agree on a known amount, because this requires a detailed explanation. If they give the company the money, the company must work and it must give them a shared portion, such as a quarter, a fifth, a sixth, a tenth, or half of the profit, with the remainder for the worker. It cannot be an unknown amount, that is not valid. Nor can it be a fixed sum of money, that is not valid. It must be a shared portion, where the worker works and the profit is divided between them in thirds, quarters, or fifths. These are lawful companies.
The presenter:
May Allah reward you with good,
Source
فتاوى المسجد الحرام (شعبان ١٤١٧ هـ) - ١ — archive.org (46:17)
The Arabic text is a machine transcription of the audio recording.