Resolutions of the Securities Commission Shariah Advisory Council

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Shariah Criteria for Listed Securities An example of sadd zariàh is someone who sells grapes to a person who processes them to make wine. According to the Maliki Mazhab, such sale is prohibited because every act of buying and selling that results in prohibited issues is prohibited by law. 373 Principle of al-Taàrudh Bayna al-Masalih Wa al-Mafasid (Meeting Point of the Good and Adverse) In certain cases, with regards to studies made on a company, elements of maslahah to mankind are present but at the same time, adversity may arise if certain action is approved. In such a situation, Islamic jurists are of the opinion that a decision has to take into account what is more aslah (best) between abolishing the adversities and reaping the benefits. Izz al-Din urged when there is a meeting point of the good and adverse, the solution is to weigh intelligently how far the good is implemented and adversity is avoided. 374 Relationship of Image and Principle of Shariah The Shariah principle for mixed companies as clarified earlier is also used to assess the image status. In order to make the relationship between the Shariah principle and image even clearer and more complete, the following principles were used for the image criteria. The three main principles are: Maslahah Rajihah A company’s activity which is related to maslahah rajihah is an activity that benefits mankind, but incorporates mixed elements, which can be forgiven. For example, activities which involve the rights of non-Muslims or have syubhah elements can make it difficult to compute the ratio of contribution of such activities towards the income of the company. Company activities which are closely related to this method are hotel activities, including resorts and chalets. Although hotel activities or rest houses were initially permissible according to the Shariah, but due to other 374 Izz al-Din ‘Abd al-Salam, Qawaìd al-Ahkam, vol. 1, p. 83. 169
Resolutions of the Securities Commission Shariah Advisory Council supporting services which are prohibited by the Shariah, such as the sale of alcohol, massage parlours, night clubs and others; hotel activities are bound by the image criteria. However, in order to honour the rights of non- Muslims, it is forgiven. Sadd Zariàh Company activities classified under this method are activities whose benefits are disputed by the Islamic jurists and may give rise to detrimental acts or aspersion if they are not controlled. One such activity is the manufacturing and marketing of condoms. The condom itself initially does not give rise to any problem if used in a permissible way. But studies showed that condoms are used for immoral activities and can give rise to aspersions, such as promiscuity which is prohibited. Hence, such activities have to be controlled by adopting the sadd zariàh method. Meeting Point of Maslahah and Sadd Zariàh The meeting point of maslahah and sadd zariàh can happen when an activity is seen as one that brings enormous benefit to mankind. However, at the same time, there are mixed activities which give a bad perception to the Islamic image and also in the eyes of Muslims. An example of such an activity is a food and drink processing company which brings benefits to society. However, its subsidiary is involved in the rearing of pigs or processing of pork, although the contribution from this prohibited activity is below the benchmark of 0.05 per cent. The maslahah is that most of the processed foods and drinks are halal and give benefits to society. Due to the prohibited element which also concerns food, the image implicating the unhealthy mixture of activities becomes a concern to the SAC in assessing which is more aslah to society. 170
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Two: Qabadh Hukmi or Qabadh Ma`nawi
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Resolutions of the Securities Commission Shariah Advisory Council

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