Talk of Mufti Ebrahim Desai Saheb
Shari’ah Compliant Business Campaign
at Madrasah In’aamiyyah, Camperdown, Sunday, June 20 2004

My dear brothers and respected elders, Ulama Kiraam and Huffaaz Kiraam,

“Say, O Muhammad, verily, my Rabb has guided me on the straight path. The path that is firm. It is the millat and deen of Ibraahim and I am not from the mushrikeen. Say, O Muhammad, my salaat, my hajj, my living and my dying is for Allah who is rabbul aalameen. There is no partner to Allah. This is what I am ordered to do ad I am from those that submit.”

It gives me great pleasure and honour to welcome each and everyone of you to our fourth Shari’ah Compliant Business Campaign. We make du’aa to Almighty Allah Ta’ala that Allah Ta’ala grant us ikhlaas and sincerity and Allah makes this campaign a success, Ameen.

My dear brothers and respected elders, the attitude of Shari’ah compliancy, the desire and will to conduct all our affairs according to Shari’ah is motivated and enhanced by Imaan. As Muslims, we believe in death, we believe in life after death and accountability in the court of Allah. The more conscious we are of death, life after death and accountability in the court of Allah, the more conscious we will be of Shari’ah compliancy.

In the pre-Islamic era, in the time of Jaahiliyyah, drinking wine and alcohol was the order of the day. People were addicted to wine and alcohol. The sale of wine and alcohol was so common that it generated the biggest revenue and the economy was largely dependent on that revenue. You and I know the potential of big revenues. It is a means of social empowerment, it is a means of economic empowerment and it is a means of political empowerment.

Rasulullah [Sallallahu Alayhi Wasallam] advised the Sahaaba about the harms of wine and alcohol and gradually removed the biggest generating revenue through wine and alcohol which had a profound impact on their economy. It was easy for the Sahaaba to tolerate and bear the huge financial loss by abandoning the sale of wine and alcohol as that was motivated by Imaan, the consciousness of death, life after death and accountability in the court of Allah on the day of Qiyaamat.

Abdullah ibn Umar [Radhiallaahu anhu]  states that when the verse,

O you who believe, verily wine and gambling and worshipping idols and determining faith with arrows are fitlh, abstain was revealed

the Sahaba immediately expressed submission and subjugation and abandoned drinking and selling of wine and alcohol forever.

One sahabi had invested all his capital in importing wine from Syria. He comes with a full caravan of wine. When he reaches the outskirts of Madina Munawwarah, he was informed that wine is prohibited forever. On one side, he has to submit to the order of Allah and on the other side there was a huge financial loss. He goes to Rasulullah [Sallallaahu Alayhi Wasallam] and enquires what he should do. Rasulullah [Sallallaahu Alayhi Wasallam] informed him that drinking wine is prohibited and the sale of wine is also prohibited. Rasulullah [Sallallaahu Alayhi Wasallam] instructed him to destroy all his wine and destroy all its containers. This Sahaabi was motivated by his Imaan, the consciousness of death, life after death and accountability in the court of Allah, and he bore a great financial loss in order to maintain Shari’ah compliancy.

Let us put ourselves in that condition, on one side we could earn millions while violating the laws of the Shari’ah. On the other side, we could lose millions while submitting to the Shari’ah, what would we do? If we put Shari’ah before us, it will be easy for us like how it was easy for the Sahaaba [Radhiallaahu anhum]. If we put money before us, then it will be difficult. This is what makes our niyyat very important. Rasulullah [Sallallaahu Alayhi Wasallam] said

 The intention of a believer is better than his actions as that is the stepping stone to do good.

There are many people sitting here who made sincere intentions, they were soaked in interest and now are out of it. Many of them are, in fact, sitting with credit balance.

My dear brothers and respected elders, to do our business according to the Shari’ah is so important that the acceptance of our ibaadat, our salaat, our fast, our hajj and our going out in the path of Allah, all depends on doing our deals and business according to Shari’ah. We may perform our 5 times Salaat, we may fast, we may do hajj, and we may go out in the path of Allah. We may even do business with our own money, but if our business is not Shari’ah compliant, we could risk the loss of all our goods.

Hazrath Zayd ibn Arqam [Radhiallaahu anhu] was a great Sahaabi. There is reference of him in Surah Munafiqoon. In one war, he heard Abdullah ibn Ubayy, a Munaafiq, saying

when we return to Madina, the honourable people of Madina will remove the disgraced people from Madina referring to Rasulullah [Sallallaahu Alayhi Wasallam] and the Sahaba. Zaid ibn Arqam [Radhiallaahu anhu] informed Rasulullah [Sallallaahu Alayhi Wasallam] about this. Rasulullah [Sallallaahu Alayhi Wasallam] called Abdullah ibn Ubayy and enquired from him about the statement. Abdullah ibn Ubayy, the Munaafiq, denied this. Allah Ta’ala revealed and confirmed what Zayd ibn Arqam [ra] said. Rasulullah [Sallallaahu Alayhi Wasallam] called Zayd and told him that Allah has confirmed his truthfulness.

Imagine what a great Sahaabi Zayd ibn Arqam [ra] was. What he said in an isolated part of the world, was confirmed by Allah in the heavens. He performed many Salaats behind Rasulullah [Sallallaahu Alayhi Wasallam]. Imagine the virtue of just one Salaat behind Rasulullah [Sallallaahu Alayhi Wasallam]. He goes for Hajj with Rasulullah [Sallallaahu Alayhi Wasallam]. Once Zayd ibn Arqam sold an item to a woman for 600 dirhams. She did not pay him the money. He then purchased the same item from her for 800 dirhams. He got his item back and 200 dirhams more. She enquired from Aaisha [Radhiallaahu anha] about the deal. Aaisha [ra] told her

 You have done a bad deal

Aaisha [ra] also sent a message to Zayd ibn Arqam [ra].

Aaisha informs him that if he does not make Tawbah and if he does not make his deal Shari’ah compliant, then he will lose all his Salat, all Hajj and all the Jihaad with Rasulullah [Sallallaahu Alayhi Wasallam].

My dear brothers and respected elders, it is clear from these two examples that Shari’ah compliancy is motivated by Deen and Shari’ah compliancy is foundational for the acceptance of our ibaadat.

I also want to take advantage of this opportunity to remove a misconception. Many people believe that the religion of Islam is only confined to Salaat, Zakaat, Hajj, etc. and it does not deal with business and economics.

The religion of Islam is complete and comprehensive, perfect and absolute. There are no flaws and deficiencies in Islam. It provides guidance in every aspect of life including economics. Let us examine briefly the beauty of Islamic economics in relation to Socialism and Capitalism.

Socialism and Capitalism are absolute economic systems and do not address other issues of life. Their purpose is only economics and they dedicate all their resources in establishing a powerful economy. Whereas economics is just one aspect of the many aspects of Islam, yet it has proven to be more successful and prosperous than socialism and capitalism which are supposed to be absolute economic systems.

The success and prosperity of Islamic economics is exemplified from the four basic principles of business and economics: a) Determination of priorities, b) Allocation of resources, c) Distribution of income, d) Development and empowerment.

In socialism, the government controls Determination of priorities, it controls allocation of resources, it controls distribution of income and it controls development and no individual has any right in any one of the four aspects of economics as independent choices may lead to an imbalance in the demand and supply of goods. This system has failed the test less than a century and led to the devastating economy of Russia. One Russian President, Mikhail Gorbachev, hoped that Socialism was tested in one small African continent rather than it being tested in a large country like Russia. In any event, such a statement would be not be well received by the African Union as that goes against the grain of African Renaissance. I wonder what Tabo Mbeki would have responded to this statement reducing the African continent to just a testing field. Nevertheless, imagine Tabo Mbeki and his government have to look for a wife for you and I, and we have to accept whatever they choose for us. Surely that would cause chaos. Marriage is an individual choice, so too is economics an individual right. This is clearly exemplified in the verse:

And we have elevated some (the rich) over others (poor)

The socialist system failed. The capitalist system is also not free of any deficiencies. It does grant individual rights but without any moral restrictions. That generates many immoralities in the economic system which impacts on the other aspects of life. In Islam, every individual is given an independent right with moral and legal restrictions. This is a Divine system which stood the test of 1400 years and is the most successful and prosperous economic system. It is up to us to understand the Islamic economic system, appreciate it and implement it.

My dear brothers and respected elders, before I discuss some Shari’ah compliancy deals, I want to also want to discuss the shar’ee position of earning. To earn an income is either fardh (compulsory) or haraam (prohibited) or Mustahabb (desirable) or Mubaah (permissible).

If a person has no source of income, and he has to support himself and his dependants, then it is Fardh for him to earn an income.

If a person does not earn an income and his dependants suffer, then he will be sinful for neglecting a Fardh act.

It is Haraam (prohibited) to earn an income to express pride and arrogance.

It is Mustahabb (desirable) to earn an income to fufil needs of the poor and needy and support the course of Islam.

It is Mubaah (permissible) to earn an income to maintain one’s dignity and honour and avoid begging.

Allah Ta’ala states,

O you who believe, spend from that which you earned and from that which we took out for you from the ground.

Shah Abdul Aziz [ra] states in the explanation of this verse that the best form of income is through ijaarah (business), then through farming, then through writing Islamic literature.

In tijaarah and farming, a person is fulfilling his needs and the needs of the people and in writing Islamic literature, a person is fulfilling his needs and also educating himself.

According to the Shari’ah, it is compulsory to study the laws of business before doing business.

Hadhrat Umar [Radhiallaahu anhu] states, ‘That person who does not understand Deen (laws of business), should not do business in our market places.’

Hadhrat Ali [Radhiallaahu anhu] states, ‘If a businessman is not a Faqih (does not know the laws of business and trade), he will drown in interest.’

It is also stated in Fataawa Bazzaaziyah that if one does not know the Shari’ah laws of business, he should keep an Aalim of Deen with him. We have people in different departments in our business, we should also create a department of Shari’ah Compliancy. Have an aalim whose sole responsibility will be to see the shari’ah compliance of the business. The barkaat and blessing of this can never be imagined and comprehended. May Allah grant our businessmen to introduce this new department in their business, Aameen.

Insha Allah we shall continue in the next session.

A schedule of my talk is distribute to you. I shall discuss the topics in sequence. If time permits, I will cover all the aspects or else you may refer to the points in the schedule.

My dear brothers and respected elders, I want to remind you the purpose of this Shari’ah Compliance Business Campaign:

1.      Identify un-Islamic activities;

2.     Create an awareness of those un-Islamic activities;

3.     Consider and explore alternatives to un-Islamic activities.

 Activity 1 - Partnership

At the outset, we should understand that man by nature is a disputer. Allah says

Man is the biggest disputer.

However, in spite of the disputing nature of man, Allah ta’ala has permitted man to deal and the basic principle of dealing with people is

‘do not dispute’.

On one side, man has a disputing nature, he has to deal with people and he has to also avoid disputes. Therefore, Shari’ah has emphasised that whenever a person enters into any deal, he must take all the necessary precautions to avoid a dispute. It is a common practise among people, especially, among close family members that they enter into a partnership without any clear agreements and official documents. The family partnership carries on for some time until the intolerant nature of man exemplifies itself and leads to a dispute. One partner works more in business than the other. One partner draws more money from the partnership than the other. One partner goes on hajj, Umrah, holiday trips or is busy buying expensive cars and purchasing expensive houses. All these irregularities are observed by the other partners and suddenly there is a strained relationship and suddenly, there is an explosion.

Such an attitude in partnership where one partner is unjust to the other and there are no terms and conditions to regulate the partnership must lead to a dispute. Allah gives us the incident of the two partners at the time of Dawud [Alayhis salaam].

One partner had 99 sheep and the other had one sheep. The one with 99 requested that the one sheep be also given to him. Allah says.

Verily your partner has oppressed you by asking you to add your sheep to his and verily many partners oppress one another

The Fuqahaa have ruled that wherever there is a possibility of a dispute, it is compulsory to avoid it. If one does not do that, it is a sin. It is very important in a partnership, irrespective of who you deal with, family or outsider to be clear and forthright.  Never enter into a partnership without addressing every aspect of the partnership. That includes the type of partnership, the capital investment, the profit sharing and the period of partnership. If there is any ambiguity in the terms and conditions of the partnership, that may lead to a dispute, that partnership is not permissible. It is our advise that when you enter into a partnership, draw up the terms and conditions and have it checked by the Ulama before commencing the partnership.

At times, it happens that a partner wants to terminate his partnership before the date of maturity, and that may cause harm to the partnership. For example, I invest R1 million and you also invest R1 million over a period of 5 years. After 1 year, I decide to terminate the partnership. That can cause harm to you. The partners may agree that in the event of any partner wanting to terminate the partnership, they may do so only if there is mutual agreement. If there is no mutual agreement, then the partnership must continue until the date of maturity. This is based on the hadith of Rasulullah [Sallallaahu Alayhi Wasallam].

Rasulullah [Sallallaahu Alayhi Wasallam] prohibited from two transactions in one.

I also wish to clarify that in a partnership of active and sleeping partners, the partners may agree for an active partner to draw a monthly salary. That is apart from his agreed profits.

Before I proceed with the next activity, In a partnership, all the partners should take cognisance of the verse

There is no secrecy of three but the fourth is Allah. There is no secrecy of five but the sixth is Allah.

Activity 2 - Car Financing

It is a general practise of many Muslims to purchase cars and have them financed through Conventional Banks. According to the Shari’ah, this is not permissible as the purchaser is involved in an interest bearing transaction. This also creates a problem for Muslim car dealers as they are somewhat involved in the interest bearing transaction. Allah Ta’ala states,

Interest is expressly and explicitly prohibited in the Qur’aan and Hadith. Imaam Abu Hanifa [ra] stated that the most severest punishment announced for Muslims in the Qur’aan is regarding interest. Punishment that will be meted out to kuffaar will be meted out to Muslims. Allah declares war against those who are engaged in interest. Allah says.

Announce a war from Allah and His rasul

I decided to gather some information regarding the extent we are engaged in interest and effectively have chosen by our action to enter into the battlefield with Allah. Muslims purchase an average of 200 vehicles per month. In monetary value, that is approximately R20 million and the approximate interest payable over 60 monthly instalments by Muslims is R7 million.

Alhamdulillah, there has been various efforts to create Shari’ah compliant alternatives to car financing and Alhamdulillah with the fadhl of Allah, one product is on the verge of it being materialised under the chairmanship of Yunus Akoo and his team. They have consulted with various ulama and also consulted the Darul Ifta. We have gone through the product and initially disapproved of it as there were two transactions in one – hiring and purchasing. It is mentioned in the hadith

Yunus Akoo and his team co-operated with us and finally agreed on a product of ijaarah and aariyah. This is a great bounty of Allah. This is how it will work:

1. Lessee indebted from day one, 2) Allowed to pay monthly, 3) 12 – 60 months, 4) no PDI, 5)  ownership after rental paid, 6) Enquire from Ulama.

However, I must emphasise that one is the rule and the other the implementation of the rule. While we agree the principle is Shari’ah compliant, we urge the members to ensure its proper implementation. I also suggested that there be a group of Ulama to supervise the product.

Activity 3 - Money Exchange

In principle, it is compulsory to maintain equality between two same currencies, for example, I borrow R1000 from you. I have to return R1000 to you. You cannot demand any surplus amount. Any conditional surplus will be interest. However, if I voluntarily give you any surplus from my side, then that is permissible.

Rasulullah said, ‘The best among you is he who is best in payment.’

It is not compulsory to maintain equality between two different currencies, for example, rands and dollars. It is also not necessary to maintain the market value of dollars. If the present value of a dollar is T7, and if we mutually agree for the amount to be R8, it is permissible. Furthermore, it is also not necessary that both currencies be exchanged in the same sitting. If one currency is taken possession of, that will be sufficient.

 Some currencies have some other value besides the monetary value, for example, the R5 inauguration coin, that can be sold for a surplus amount, for example, R50. The surplus R45 will not be interest as the value of the R5 is not considered. The sentimental value is taken into consideration.

Activity 4 - Abiding by the laws of the country

According to Shari’ah, Muslims residing in non-Muslim countries must abide by those laws of the country that are not un-Islamic. As Muslims residing in non-Muslim countries, we have many responsibilities. We have to practise on Islam and propagate Islam. For that, we have to look after our respect, dignity and honour.

 It is not appropriate for us to violate the laws of the country. If we are convicted, that creates a bad image for Muslims, and even hampers the propagation of Islam. We are living in such a country that in view of the political climate in the world, we should appreciate our country and its government.

1.      Any violation of import and export rules is not permissible. I discussed the aspect of B route before. That is not permissible.

2.     It is also not permissible to import goods on somebody else’s import licence and avoid paying taxes.

3.     Another aspect of abiding by the laws of the country is UIF.

It is permissible for registered employees to collect UIF. We also advise employers to reflect the full salary in the registration. There could be a dispute between the employee and employer. The employee would want to collect UIF according to his full salary. If his full salary is not reflected, and the matter goes to CCMA, then the employer will be held responsible.

Activity 5 - Copyrights, Patents and Trademarks

According to Shari’ah, copyrights, patents and trademarks, etc. are recognised rights with two conditions; the right must be registered and secondly the bearer of the rights must adhere to terms and conditions of the rights. For example, if I have the right to sell Bata’s shoes, I must maintain the terms and conditions as set out by Bata. If I violate that, that will have implications on Bata.

Since Shari’ah recognises all these intangible rights based on the principle of first right or haqq-e-asbaqiyyat, it is not permissible to illegally use somebody else’s without consent from the owner. If he does so, it is not permissible and the income will also not be permissible. Recently, there has been a crackdown from the government of pirate copies of CD’s, etc. We should also take cognisance of that and not violate the laws of the country.

Activity 6 - Intruding in a Private Sale

It is mentioned in the Hadith.

Rasulullah [Sallallahu Alayhi Wasallam] prohibited from dealing upon the deal of a person.’

According to Shari’ah, if a person is engaged in a deal, and he is inclined towards concluding the deal, it is not permissible for a third party to intrude into the deal. If there was no inclination of concluding the deal, then it is permissible to enter the deal and make an offer. The same rule applies when one sends a marriage proposal.

Activity 7 - Concluding a Deal

According to Shari’ah, a purchase and sale transaction is concluded with a proposal and acceptance. If a person made a proposal, he can withdraw before the other party accepts. The other party is also at liberty to accept or reject the offer. Once both parties have accepted the deal, the deal is concluded and now no party can unilaterally withdraw from the deal. Both parties are bound by the transaction and have to honour the terms of the deal.

If any party wants to withdraw from the transaction, he may request the other for a dissolution of transaction known as Iqala. Iqala in Shari’ah will take place according to the original terms of the transaction. The seller cannot charge handling fees to the purchaser.

Once the transaction is concluded, the purchaser has the right to return the item due to a defect in the item. This is known as Khiyar-e-Ayb. However, if the seller absolves himself from any claims of the purchased items, for example, in the commonly practised method of veotstoets in the sale of motor cars, that is permissible.

The purchaser cannot claim for any defect thereafter. However, if the purchaser of the vehicle, for example, enquired from the seller of any defects in the vehicle and the purchaser is aware of any defects, it is compulsory for them to disclose such defects. If he concealed those defects, the purchaser will have the right to return the item as he is a victim of deception. This is known as khiyar-e-gabn. Obviously, this will be an issue of justice and have to be determined through litigation or arbitration. I also wish to inform you that the Med-Arb Council of the Darul Ifta is now an officially registered trust.

Activity 8 – Withholding a debtor’s possession

It is very unfortunate today that many Muslims do not honour payments timeously or even worse, completely refuse to honour payments. The creditor suffers the consequences. At times, he does not have any recourse whatsoever to claim his right.

In such a situation, if a creditor gets hold of his debtor’s possession, whether it is cash or kind, he may withhold the debtor’s possession in lieu of his debt. For example, I owe you a R50.000 and I did not honour your debts, you are a mechanic and I brought my car worth R50,000 to you for servicing. It is permissible for you to withhold the car in lieu of the R50,000. This obviously, may lead to much acrimony and abuse, it is therefore, advisable to first consult a reliable Aalim and obtain a Shar’ee ruling before withholding the item of the debtor in lieu of one’s debt.

Activity 9 – Cellphones with Camera

According to Shari’ah, it is prohibited to take pictures of animate objects.

Ythe people with the severest punishment are the picture makers

The angels of mercy do not enter a house in which there is a picture or dog.

In principle, if an item has dual or multiple purposes, some of which are permissible and others prohibited, it is permissible to sell such items. The income will be Halaal. If the owner abuses the item, he will be sinful.

Unfortunately, cellphones with the camera feature can be very dangerous. Pictures of girls are taken and stored and people engage in the Zina of the eyes and many more evils through that feature. We strongly discourage the purchase of such cellphones.

Activity 10 – Submission

I discussed many topics in this sessions. It is obviously difficult to digest everything in this session. I reiterate to have a Department of Shari’ah Compliancy in your business and have an Aalim to supervise that or obtain a Fatwa from Ulama.

In my introduction, I discussed about Imaan and Shari’ah compliancy. In conclusion, I share the following verse with you.

Say, O Muhammad, verily, my Rabb has guided me on the straight path. The path that is firm. It is the millat and deen of Ibraahim and I am not from the mushrikeen. Say, O Muhammad, my salaat, my hajj, my living and my dying is for Allah who is rabbul aalameen. There is no partner to Allah. This is what I am ordered to do ad I am from those that submit.

We make du’aa to Allah that He strengthen our Imaan, give us tawfeeq to follow the dictates of Imaan and give us tawfeeq to make our business Shari’ah Compliant, Aameen.