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I don’t see why they cannot? As long as the Sukuk is implemented correctly then it doesn’t matter if they’re Muslim or not right?
Just like we allow Muslims to buy stock in a companies, the shares of which can be issued by Muslims or non Muslims
Similarly I would imagine it no different for Muslims to be able to acquire a share in the ownership of a Sukuk issued by non Muslims
Though I do think it’s important that the Sukuk be evaluated for compliance regularly by a board of scholars to confirm the conditions are not being violated
What is a sukuk? Is there another alternative term that is commonly used for this?
Also when and why is a sukuk important/ relevant?
They’re a fixed income investment class - like government bonds. Except instead of being based on interest on money, it’s based on an asset
So they’re important because they’re the only halal type of fixed income investments.
I found this to be a good short intro into what they are.
A sukuk is essentially a pool of investors who have loaned funds on an income-generating asset. Until the loan as been repaid, the investors share in the profit and loss of the asset.
Essentially they are a great way for large business and or governments to borrow funds without interest.
The risk comes in with the asset completely depreciating and/or your position within the sukuk depreciating. Guaranteed Fixed income is not halal.
Sorry I meant alternative to…
Mufti Taqi Usmani wrote a damming fatwa against sukuk that guarantee income. It’s refered to as the doomsday fatwa.
Subhaan Allah no way. Where can one access this Fatwa?
Does this mean Sukuk are Haram? How does one know for sure the Sukuk being offered by Wahed are Halal?
Yhh, I don’t see a reason why they cannot either. My knowledge of Sukuk is where people loan you a sum of money and they share the risk of the losses or profits until the loan is paid back.
Actually, can that not be seen as riba? It reminds me of this hadith:
It was narrated that Muslim bin Yasar and 'Abdullah bin 'Atik said:
“Ubadah bin As-Samit and Muawiyah met at a stopping place on the road. 'Ubadah told them: 'The Messenger of Allah forbade selling gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates”‘- one of them said: ‘salt for salt,"’ but the other did not say it-“unless it was like for like, hand to hand. And he commanded us to sell gold for silver and silver for gold, and wheat for barley and barley for wheat, and to hand, however we wanted.”’ And one of them said: “Whoever gives more or ask for more has engaged in Riba.”’
Grade: Sahih (Darussalam)
| Reference | : Sunan an-Nasa’i 4560 |
|---|---|
| In-book reference | : Book 44, Hadith 112 |
| English translation | : Vol. 5, Book 44, Hadith 4564 |
So essentially, you are giving money, and getting more money back in return if you make profit, is the process of risk being involved and you take that risk that makes it halal? Like here, they would lose out if the money is bankrupt right? or does the lender have to pay it back regardless?
Well as far as I’m aware the main Islamic authority Wahed adheres to has Mufti Taqi on it. So by extension they would be adhering to his limitations as well as others. But even then given Wahed’s approach I can say with certainty they wouldn’t use problematic sukuk.
This mentions that bonds are not considered halal by many- is this the majority opinion of scholars?
How can we differentiate between a problematic and non problematic sukuk