Continuation of the discussion on the ruling regarding trading in stocks.

The Shaykh : I find myself religiously compelled to clarify the issue, so we conclude whether his right is invalidated upon his death or not. This is because we say that shareholding today is not based on Islamic legal rulings. The original participation in these shares, before they are converted into specific proportions of currency—such as one thousand dinars or fifty dinars—is, as is known in reality, deposited in banks. Then, over time, if they have the amount allocated to work in, for example, trade or establishing a factory or the like, until these funds are converted into goods or a factory, they remain in interest-based banks. From here begins the legal problem that does not allow a Muslim to participate in any project established today. When will this question arise? It arises when there are joint-stock companies that have established a methodology for the company in accordance with Islamic principles or rulings. After that, it is asked: Is the right of this participating shareholder to remain a shareholder severed from the heirs due to his death, or does this right continue? In answer to that, I say it continues, because there is nothing to prevent continuity except if there are conditions in the agreement that his right ends upon the death of the shareholder. However, the ruling is originally not Islamic, and therefore we do not advise participation in this type of shareholding.

The questioner : May Allah bless you.

The Shaykh : May Allah bless you.

The questioner : The condition they impose is that the participating shareholder must know the other shareholders in this company. Is this not a condition?

The Shaykh : My brother, whatever is built upon a defective foundation is defective. As long as the original matter is not prescribed, the matter is concluded.

The questioner : May Allah reward you.

The Shaykh : May Allah bless you.