Title

What is the ruling about SASOL INZALO Shares?

Question

What is the ruling about SASOL INZALO Shares? Can you give some detail account...

Answer

In the name of Allah, Most Gracious, Most Merciful

Assalaamu `alaykum waRahmatullahi Wabarakatuh

Primarily, there is a difference of opinion among the Ulama in regards to the permissibility of purchasing shares in general. There are many aspects concerning shares that contravene the tenets of Islamic Commerce whereby the proceeds of such investments are tantamount to Ribā. Kindly view our research article on the subject. ( Here )

Nevertheless, under the assumption of the view of those Ulama who permit shares, Sasol Inzalo Shares will still be considered impermissible. Hereunder are certain conditions relating to the two types of investment funds provided by Sasol Inzalo which are problematic and oppose juristic principles:

1. Sasol Inzalo Ordinary Share – “Funded Invitation”

• “you will not be able to Sell your Sasol Inzalo Ordinary Shares during the Funded Invitation Minimum Investment Period of three years;” (Clause 2.1)
• “after the Funded Invitation Minimum Investment Period until ten years after the Effective Date you can only Sell your Sasol Inzalo Ordinary Shares to Black People and/or Black Groups;” (Clause 2.2) 

• “you cannot Encumber your Sasol Inzalo Ordinary Shares for a period of ten years from the Effective Date (the “Empowerment Period”)”(Clause 2.3)
• Q: “MAY I FREELY SELL MY SASOL INZALO ORDINARY SHARES BEFORE TEN YEARS AFTER THE EFFECTIVE DATE?”

• Q: “CAN I USE MY ALLOCATED SASOL INZALO ORDINARY SHARES FOR SECURITY PURPOSES?” 

2. Sasol Inzalo Ordinary Share – “Cash Invitation”

• There will be a two year restriction on Selling your Sasol BEE Ordinary Shares. (Clause 2.1)
• After the lapse of the two year period until the end of the ten year period you may only Sell your Sasol BEE Ordinary Shares to other Black People and/or Black Groups.  (Clause 2.2)
• Although you are allowed to Encumber your Sasol BEE Ordinary Shares you may only do so subject to the condition that if the security has to be realised it an only be Sold to Black People and/or Black Groups until the end of the ten year period. (Clause 2.3)

(Clauses quoted from Sasol Inzalo Funded Invitation Prospectus and Sasol Cash Invitation  Prospectus  & Relevant Documents)

After examining the conditions and regulations of the Sasol Inzalo application, we have highlighted the above-mentioned problematic clauses. These conditions contravene the following Juristic Principle:

وَالْأَصْلُ فِيهِ أَنَّ كُلَّ وَهُوَ غَيْرُ مُلَائِمٍ لَهُ وَلَمْ يَرِدْ الشَّرْعُ بِجَوَازِهِ وَلَمْ يَجُزْ التَّعَامُلُ فِيهِ وَفِيهِ مَنْفَعَةٌ لِأَهْلِ الِاسْتِحْقَاقِ مُفْسِدٌ (تبيين الحقائق)

“The principle in this regard is that every condition:

• which the contract does not necessitate,
• neither is apt for it,
• the Sharī‘ah did not permit it,
• there is no continuous practice of the people in it,
• and there is there is some benefit for one of the deserving parties (buyer, seller etc),

Examples presented by our illustrious jurists regarding such impermissible conditions are:

• A person sells house to a buyer on condition that he continue dwelling therein for a further month and thereafter he will hand it over to the purchaser
• A person sells a conveyance to a person and conditions that he will continue to use it for another month etc
• A person will sell his article to the purchaser on condition the purchaser grants the seller a loan
• A person will purchase cloth from a seller on condition he sews in into a shirt etc.

These are simple examples of impermissible conditions in transactions. After examining the conditions placed by Sasol, it becomes apparent that such conditions definitely corrupt the transaction. This is more and above the fact that shares are impermissible in the first place as mentioned previously.

And Allah knows best

Wassalam

Ml. Yusuf bin Yaqub,
Student Darul Iftaa

Checked and Approved by:

Mufti Ebrahim Desai
Darul Iftaa