Question

بِسْمِ ٱللَّٰهِ ٱلرَّحْمَٰنِ ٱلرَّحِيمِ

Dear mufti sahib,
I pray you are in the best of health.

I worked for my company T-Mobile US for 5 years as an engineer. As part of the compensation package, company give yearly restricted stock units equivalent to approximately 3000-6000 $USD. I used these stocks for savings for my family (i have two daughters) and i plan and pray to buy a home without interest inshAllah.

However, in the 4th year of my employment, i investigated company stock a little more. As per stock screening websites and applications I found out that T-Mobile US was actually considered impermissible to invest in. The company’s business is halal (since they are a telecommunications provider like Vodafone) but they have high debt.

This got me extremely worried since i was holding stock for 5 years and also getting good gains on it (the company price went up).

Once I found this out – i sold my stock gradually until I have no more left. I reinvested the money into shariah compliant fund like “Amana”. Now i have also resigned from the company and joined a new company with no stock options.

My question to you is, is it permissible for me to keep the money earned from selling the stocks. What about the profits?
Please be aware that it is almost my life savings and it would be incredibly hard to give up all of it. Also, i am not sure if the stock was always impermissible, since it was originally part of Wahed ETF, another Shariah Compliant fund. They have removed it since a year however.

My last question is If i do have to donate to a charity in order to purify the earnings, can I donate to my parents as Sadaqah. They are not poor but they often pressure me in helping them out, since they spent a lot on my education. What other places can I donate to purify my wealth? Does extended family count?

Do I have leeway in the Shariah for not knowing that high debt stocks are #1 impermissible and #2 T-Mobile stock became shariah non compliant sometime in my employment. Can I ask Allah for forgiveness only since I already sold everything and also changed jobs?

I implore you Mufti Sahib to help me out since this is an issue for constant distress and depression for me since 7,8 months. I also ask you for your Duas.

JazakAllah Khairun… Wa Barakallahu Feek

Answer

As the primary business is to provide lawful services then the business itself will be shari’ah compliant. If the company fails the shari’ah screening due to high levels of debt then this would mean that the company is paying large amounts of interest on its debts. Hence, one who has shares in such a company will also be considered as paying large amounts of interest and would be sinful on their part for paying interest. However, this would not necessarily impact the lawfulness of the income and profits that have been generated.

For this reason, it would be permissible to keep the profits that have been gained from the lawful income or increase in share price as this income and increase is not due to the unlawful elements of the business. However, if the shari’ah screening still fails then one must sell and move on as quickly as possible as you mentioned you have done. 

We pray that Allah the Almighty helps you through these difficult times and eases your situation.

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel