Investing money in company without knowing their business module
Fatwa No: 363256

Question

Assalaamu alaykum. In India, there is a company that claim that they trade in gold and giving almost 35 to 36% profit per year in return. Please note that when one asks about their business module, they say that it is confidential and refuse to provide any details. Is it permissible for anyone to invest in a company that does not give details as to how they are able to give such a high amount of profit? Please reply. May Allah reward you.

Answer

All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

If the work of the company is suspicious, then it is safer for one to avoid dealing with it, and it is not a condition for him to know all the details of the work.

The scholars of Fiqh stated that Mudhaarabah (refer to fatwa 81579 for a definition) may be general, in a way that the owner of the capital money gives his money to the one who invests it without a condition. However, a person should not indulge in a partnership with someone whom he does not trust in his religion and his trustworthiness. Some scholars of Fiqh disliked making a partnership with a non-Muslim or with a Muslim who does not avoid dealing in what is forbidden.

Shaykh Zakariyya Al-Ansaari said in Sharh Al-Bahjah, "But it is disliked to establish a partnership with a disbeliever, or with someone who does not avoid interest and the like."

Therefore, if those who run the company are trustworthy and one feels content that they abide by the Islamic conditions in their work, then there is no harm in investing money with them, even without knowing the details of their transactions and how they are conducted; otherwise, it is better to avoid dealing with them.

Allah knows best.

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