Original Question: “If a Shariah-compliant Equity Fund (e.g. SPUS) Holds Companies That Are Complicit in Wrongdoing, What Should Investors Do? Should They Sell or Purify?”, IFSG Shariah Team Responds.
TL;DR:
Owning units in a Shariah-compliant fund does not automatically make an investor complicit in a company’s wrongdoing. However, it does not automatically absolve the investor either. The answer depends on two key questions: is there genuine wrongdoing, and does the investment meaningfully strengthen it? This is because almost every listed company contains a mixture of permissible and impermissible elements, and contemporary Shariah screening does not require absolute purity. It checks that the core business is lawful and that any impermissible income stays within acceptable limits. Any impermissible income received should then be purified by donating the relevant amount to charity, commonly known as purification (tathīr). The decisive issue is where the threshold of prohibited complicity is crossed. Where complicity is direct, material, and substantial, the holding should be exited and any impure income purified. Where it is remote, incidental, or within accepted screening limits, purification suffices. Voluntary divestment nevertheless remains a praiseworthy act of scrupulousness (waraʿ) where a cleaner alternative is available. The answer is therefore neither “always sell” nor “always purify,” but a reasoned judgment that combines sound Shariah analysis with personal moral responsibility. At the very least, it means never being indifferent to oppression (ẓulm).
What “Complicity” Really Means in Investing
The question of complicity when investing through a Shariah-compliant equity fund is complex. It cannot be answered simply by asserting that every association is prohibited, nor by assuming that Shariah screening automatically eliminates all ethical concerns. A proper analysis draws upon several well-established principles of Islamic jurisprudence: assisting in sin (al-iʿānah ʿalā al-maʿṣiyah), the mixing of lawful and unlawful (al-khulṭah), predominance (al-ghalabah), a general affliction that is hard to avoid (ʿumūm al-balwā), blocking the means to harm (sadd al-dharāʾiʿ), and the purification of impermissible income (tathīr).
This article does not seek to issue a specific ruling on SPUS, which would require stock-by-stock analysis, or on any particular holding. Rather, it provides a framework for determining the appropriate course of action once a holding is reasonably determined to be materially complicit.
To answer this properly, it is helpful to distinguish between two questions that are often confused. Shariah screening is a rule-based process, applied by the fund’s Shariah board, that assesses whether a company’s core business is lawful and whether its financial ratios and non-permissible income stay within accepted limits. On the other hand, complicity asks a narrower and more personal question: does holding this share knowingly and meaningfully strengthen a specific wrongdoing? A company may pass Shariah screening yet still raise concerns about complicity, and the reverse is also possible. This article focuses on the second question.
Three Questions This Article Answers
This discussion is organised around three questions.
- First, when does complicity become Shariah-relevant?
- Second, how are companies and funds that mix lawful and unlawful elements treated, especially by contemporary scholars?
- Third, once the level of complicity has been determined, what practical action follows: divestment, purification, retention, or avoidance of future investment?
The Starting Principle: Do Not Help in Wrongdoing
The starting point is the Qurʾanic prohibition against assisting in sin. Allah commands believers to cooperate in righteousness and piety, and not in sin and transgression:
وَتَعَاوَنُوا۟ عَلَى ٱلْبِرِّ وَٱلتَّقْوَىٰ ۖ وَلَا تَعَاوَنُوا۟ عَلَى ٱلْإِثْمِ وَٱلْعُدْوَٰنِ ۚ وَٱتَّقُوا۟ ٱللَّهَ
“Cooperate with one another in goodness and righteousness, and do not cooperate in sin and transgression. And be mindful of Allah.” (Qurʾan 5:2)
The Two Things That Must Be Present
For this principle to apply to an investment, two elements must be established. First, there must be a clear underlying wrongdoing. Second, there must be a meaningful form of assistance, contribution, or support that strengthens that wrongdoing. Without the first element, no Shariah violation arises. Without the second, the matter may raise ethical concerns but does not necessarily amount to prohibited complicity in the strict legal sense.
In practical terms, complicity means knowingly providing meaningful assistance, support or strengthening a wrongdoing. Not every connection qualifies. One way to understand this is to think of it as a spectrum. At one end is direct involvement, such as a company that manufactures the weapons used in unlawful activities or supplies the technology that guides them. In the middle is contributory involvement, such as a company that knowingly provides essential, tailored inputs for that use. At the far end is a remote link, such as a company that merely operates in a particular jurisdiction, holds some interest-bearing cash, or is associated with a cause only in broad political terms. The first amounts to prohibited assistance, the second may at most, be considered disliked (makruh), and the last is generally not considered prohibited, though a cautious investor may still choose to avoid it.
When the Wrongdoing Is Obvious: Harm to Human Life
Where the harm involves unlawful killing, crimes against civilians, severe oppression, or other grave violations of human life – the first element, namely the existence of a clear underlying wrongdoing, is readily established. The scholars have established that protection of life (ḥifẓ al-nafs) is one of the five essential objectives (al-ḍarūriyyāt al-khams) that the Shariah seeks to preserve. The Qur’an emphasises the gravity of unlawfully taking even a single life:
مَن قَتَلَ نَفْسًۢا بِغَيْرِ نَفْسٍ أَوْ فَسَادٍۢ فِى ٱلْأَرْضِ فَكَأَنَّمَا قَتَلَ ٱلنَّاسَ جَمِيعًۭا وَمَنْ أَحْيَاهَا فَكَأَنَّمَآ أَحْيَا ٱلنَّاسَ جَمِيعًۭا
“Whoever takes a life, unless as punishment for murder or corruption in the land, it is as though he has killed all of humanity; and whoever saves a life, it is as though he has saved all of humanity.” (Qurʾan 5:32)
Classical jurists also discussed the prohibition of selling weapons, tools, or other means of harm to individuals who are known, expected, or strongly suspected to use them against innocent people, Muslims, or lawful society. Imam Al-Nawawi (rahimahullah) states:
ذَكَرْنَا أَنَّ بَيْعَ السِّلَاحِ لِمَنْ عُرِفَ عِصْيَانُهُ بِالسِّلَاحِ مَكْرُوهٌ، قَالَ أَصْحَابُنَا يَدْخُلُ فِي ذَلِكَ قَاطِعُ الطَّرِيقِ وَالْبُغَاةُ. وَأَمَّا بَيْعُ السِّلَاحِ لِأَهْلِ الْحَرْبِ فَحَرَامٌ بِالْإِجْمَاعِ، وَلَوْ بَاعَهُمْ إِيَّاهُ لَمْ يَنْعَقِدِ الْبَيْعُ
“We previously mentioned that selling weapons to a person known to use them for disobedience (sinful or unlawful purposes) is disliked (makruh). Our scholars stated that this includes highway robbers (qaṭiʿ al-ṭarīq) and rebels (bughāh). As for selling weapons to people at war with the Muslims (ahl al-ḥarb), this is prohibited (ḥaram) by consensus (ijmāʿ). If one were to sell weapons to them, the sale would not be validly concluded.” (Al-Nawawi, al-Majmūʿ)
The underlying principle extends beyond weapons themselves. Rather, it reflects the broader rule that a Muslim should not knowingly strengthen or facilitate injustice, aggression, or corruption on earth. This principle is further reinforced by the well-known legal maxim:
لَا ضَرَرَ وَلَا ضِرَارَ
“There shall be neither harm nor reciprocating harm.” (Ibn Mājah, 2341)
The Reality of Owning a Share
The second element – the relationship between the investor and the wrongdoing – requires closer examination. Owning shares does not necessarily amount to directly financing wrongdoing. In most cases, listed shares are purchased on the secondary market, where the purchase price is paid to another investor rather than directly to the company. This differs from purchasing newly issued shares, such as through an IPO or rights issue, where the funds are received by the company itself. Nevertheless, share ownership is not morally neutral. Share ownership may nevertheless provide indirect benefits to the company through enhanced liquidity, higher market valuation, increased corporate legitimacy, shareholder voting rights, and participation in corporate profits.
Accordingly, the key question is not whether any connection exists, but whether that connection is sufficiently direct, material, and substantial to amount to prohibited assistance. Contemporary scholars analysing this issue generally consider factors such as how direct the link is, how foreseeable the harm is, and how significant the investor’s exposure is.
Direct Harm vs. Remote Connection
Classical jurists examined similar questions in cases such as the sale of grapes to a winemaker or the sale of ordinary goods to an enemy during wartime. Imam Ibn ʿĀbidīn, a Hanafi jurist in the 19th century, explains that prohibited assistance arises when the item being sold is itself unlawful in its very essence, without requiring further transformation or intermediary steps. He writes:
فَصَارَ الْمُرَادُ بِمَا تُقَامُ الْمَعْصِيَةُ بِهِ مَا كَانَ عَيْنُهُ مُنْكَرًا بِلَا عَمَلِ صَنْعَةٍ فِيهِ… وَنَحْوُ الْحَدِيدِ وَالْعَصِيرِ؛ لِأَنَّهُ وَإِنْ كَانَ يُعْمَلُ مِنْهُ عَيْنُ الْمُنْكَرِ لَكِنَّهُ بِصَنْعَةٍ تَحْدُثُ فَلَمْ يَكُنْ عَيْنَهُ
“Thus, what is meant by that through which a sin is carried out is that whose very essence (ʿaynuhu) constitutes the prohibited object, without requiring any further manufacturing or processing… As for things such as iron and grape juice, although the prohibited object may be produced from them, it only comes into existence through a subsequent process or manufacture. Therefore, they are not themselves the prohibited object.” (Ibn ʿĀbidīn, Radd al-Muḥtār)
The same principle can be applied to modern investments, where the question is usually not the essence of a single object but how direct the company’s involvement is. A company that directly manufactures weapons for an unlawful military campaign, supplies technology used to target civilians, or knowingly finances an oppressive regime is fundamentally different from one whose link is remote, incidental, disputed or based only on broad political association. The first is closer to prohibited assistance (iʿānah ʿalā al-maʿṣiyah). The second may still justify boycott or divestment on ethical grounds, but, in the view of many contemporary scholars, a further and stronger argument is needed before the investment itself can be judged impermissible as a general ruling.
The jurists differ on how to treat the sale of an otherwise lawful item to someone who is expected to misuse it. The Hanafi position, as reflected in the discussion of grapes and iron above, is that the contract itself remains valid, because the item is not sinful in its essence, while cautioning that sin may still fall upon a seller who knows of the unlawful use. A stricter tendency, associated with the doctrine of sadd al-dharaʾiʿ and given greater weight among the Mālikī and Ḥanbalī jurists, leans toward blocking such transactions where the unlawful use is known or highly likely. For equity investment, the more workable view is to treat outward validity as governing the contract, while holding the investor morally accountable where he has reliable knowledge of grave harm.
A simple comparison that would sharpen the directness point. Paying for a company’s cloud services, software subscriptions, or advertising generates direct revenue for that company, whereas purchasing its already-issued shares on the secondary market generally does not. By that measure, everyday use of a firm’s products can be a more direct form of support than holding its shares through a passive fund. This does not eliminate concerns about equity ownership, but it illustrates why directness and materiality, not just mere association, must remain central to any assessment of complicity.
Outward Validity, Inner Accountability
This distinction is particularly important when assessing equity investments. Where a company’s primary business is lawful, a remote or indirect objectionable association does not automatically render the investment impermissible. This is reflected in the well-known juristic maxim:
الْحُكْمُ عَلَى الظَّوَاهِرِ، وَاللَّهُ يَتَوَلَّى السَّرَائِرَ
“Judgment is rendered upon outward realities, while Allah takes charge of inner secrets.”
At the same time, outward permissibility of an investment does not eliminate moral responsibility. If an investor has reliable evidence that a company materially contributes to grave wrongdoing, the outward permissibility of its main business does not absolve the investor from moral responsibility.
Distinguishing Between Hostile and Non-Hostile Parties
The Shariah distinguishes between those who actively engage in hostility and those who do not. As the verses in Surah al-Mumtahanah (8-9) below demonstrate, ordinary dealings with those who are not engaged in aggression remain permissible. Conversely, Allah warns against taking as close allies those who actively engage in hostility, expel people from their homes, or support such aggression: :
لَّا يَنْهَىٰكُمُ ٱللَّهُ عَنِ ٱلَّذِينَ لَمْ يُقَـٰتِلُوكُمْ فِى ٱلدِّينِ وَلَمْ يُخْرِجُوكُم مِّن دِيَـٰرِكُمْ أَن تَبَرُّوهُمْ وَتُقْسِطُوٓا۟ إِلَيْهِمْ ۚ إِنَّ ٱللَّهَ يُحِبُّ ٱلْمُقْسِطِينَ
إِنَّمَا يَنْهَىٰكُمُ ٱللَّهُ عَنِ ٱلَّذِينَ قَـٰتَلُوكُمْ فِى ٱلدِّينِ وَأَخْرَجُوكُم مِّن دِيَـٰرِكُمْ وَظَـٰهَرُوا۟ عَلَىٰٓ إِخْرَاجِكُمْ أَن تَوَلَّوْهُمْ ۚ وَمَن يَتَوَلَّهُمْ فَأُو۟لَـٰٓئِكَ هُمُ ٱلظَّـٰلِمُونَ
“Allah does not forbid you from being kind and just to those who have neither fought you because of religion nor driven you from your homes. Indeed, Allah loves those who act justly. He only forbids you from taking as allies those who fought you because of religion, expelled you from your homes, and supported your expulsion. Whoever takes them as allies,it is they who are the wrongdoers.” (Qurʾan 60:8–9)
These verses demonstrate that ordinary commercial dealings with non-Muslims, foreign companies, or politically imperfect institutions are not prohibited merely because of identity or association. Rather, the relevant question is whether the transaction meaningfully strengthens or facilitates ongoing wrongdoing.
Dr. Yusuf al-Qaradawi cites a saying attributed to ʿAli ibn Abi Talib concerning the categories of enemies:
عَدُوُّكَ ثَلَاثَةٌ: عَدُوُّكَ، وَعَدُوُّ صَدِيقِكَ، وَصَدِيقُ عَدُوِّكَ
“Your enemies are three: your own enemy, the enemy of your friend, and the friend of your enemy.” (Attributed to ʿAli ibn Abi Talib)
This captures an important moral intuition: support networks matter. However, as a legal principle governing investment, this intuition must still be assessed through evidence, directness, materiality, and actual capacity to influence wrongdoing. Otherwise, every modern commercial relationship could be rendered impermissible through an endless chain of indirect associations.
The Real-World Problem: Almost Every Company Is “Mixed”
This brings us to mixed companies and mixed funds. Modern listed companies are often deeply interconnected. A company may have a permissible core business while also holding interest-bearing cash, receiving incidental non-permissible income, supplying a controversial customer, operating in jurisdictions connected to injustice, or owning subsidiaries with differing levels of exposure.
In practice, most Islamic equity funds do not assess every company individually. Instead, they rely on recognised Shariah indices or screening methodologies that evaluate business activities and financial ratios. These screening methodologies were primarily designed to assess business activities and financial ratios, rather than political conduct or human-rights issues. This explains why a company may pass Shariah screening while still raising separate ethical concerns about complicity.
Why Minor Impurities Are Tolerated
Requiring absolute purity would make investing in modern public markets extremely difficult, if not impossible, because almost every listed company has some incidental exposure to non-compliant income or activities. For this reason, contemporary Shariah scholars and screening bodies generally tolerate limited incidental non-compliance. Nevertheless, some scholars adopt a stricter position and reject such screening thresholds altogether.
The practical realities of global markets reinforce this approach. The largest technology companies alone account for around one-fifth of global equity value, so excluding them wholesale does not refine a portfolio; it produces a fundamentally different investment portfolio with a different risk and return profile. This is part of why contemporary screening tolerates limited, unavoidable exposure rather than requiring total avoidance.
For this reason, contemporary Shariah screening generally does not demand absolute purity. Instead, it adopts a rule-based methodology that considers the company’s dominant business activity, financial ratios, and level of impermissible income.
It is also important to distinguish between incidental financial non-compliance, which contemporary Shariah screening may tolerate within defined limits, and direct participation in or support for grave wrongdoing. The latter requires a separate assessment and should not be treated as automatically permissible simply because a company passes financial screening.
How Scholars Weigh the Mix
Imam Al-ʿIzz ibn ʿAbd al-Salam explains this principle well that when lawful and unlawful elements are mixed, the ruling may shift according to the dominance of the unlawful element:
وَضَابِطُهَا أَنَّ الْكَرَاهَةَ تَشْتَدُّ بِكَثْرَةِ الْحَرَامِ وَتَخِفُّ بِكَثْرَةِ الْحَلَالِ… فَبَيْنَهُمَا أُمُورٌ مُشْتَبِهَاتٌ مَبْنِيَّةٌ عَلَى قِلَّةِ الْحَرَامِ وَكَثْرَتِهِ بِالنِّسْبَةِ إِلَى الْحَلَالِ، فَكُلَّمَا كَثُرَ الْحَرَامُ تَأَكَّدَتِ الشُّبْهَةُ، وَكُلَّمَا قَلَّ خَفَّتِ الشُّبْهَةُ
“The governing rule is that objectionability (karāhah) intensifies with the abundance of the unlawful and lessens with the abundance of the lawful… Between the two lie doubtful matters, determined by the smallness or largeness of the unlawful in relation to the lawful: the more the unlawful, the stronger the doubt (shubha); and the less the unlawful, the lighter the doubt.” (Al-ʿIzz ibn ʿAbd al-Salam, Qawāʿid al-Aḥkām)
This reflects the principles of al-khulṭah (the mixing of lawful and unlawful elements) and al-ghalabah (giving legal weight to the predominant element). It also aligns with the principle of ʿumūm al-balwā (widespread hardship that is difficult to avoid), which recognises that complete avoidance may not be realistically possible in every circumstance. . Imam Al-Nawawi states:
وَلَوِ اخْتَلَطَ دِرْهَمٌ حَرَامٌ أَوْ دَرَاهِمُ بِدَرَاهِمِهِ وَلَمْ يَتَمَيَّزْ، أَوْ دُهْنٌ بِدُهْنٍ أَوْ غَيْرِهِ مِنَ الْمَائِعَاتِ وَنَحْوِ ذَلِكَ… طَرِيقُهُ أَنْ يَفْصِلَ قَدْرَ الْحَرَامِ فَيَصْرِفَهُ إِلَى الْجِهَةِ الَّتِي يَجِبُ صَرْفُهُ فِيهَا، وَيَبْقَى الْبَاقِي لَهُ يَتَصَرَّفُ فِيهِ بِمَا أَرَادَ
“If an unlawful dirham, or several, become mixed with his own dirhams and cannot be distinguished, or oil with oil or another liquid, and the like… the proper method is to separate the amount of the unlawful and direct it to the channel in which it must be spent. The remainder remains his to dispose of as he wishes.” (Al-Nawawi, al-Majmūʿ)
What Purification Does and Does Not Do
Under this framework, a company whose core business is lawful may still be considered investable if its non-permissible income and financial ratios remain within accepted thresholds set by a qualified Shariah Board or screening methodology. The impure portion is then purified by donating the relevant amount to charity without intending a reward. This is the function of purification in Islamic investing. Purification is not a mechanism that converts an otherwise prohibited investment into a permissible one; rather, it is a remedy for incidental impurity within an otherwise tolerated mixed investment.
Thus, purification applies only where the impermissible element is minor and incidental, and falls within the limits of a recognised screening framework. It addresses impermissible income received (such as the non-compliant portion of dividends), not the underlying business itself. Where the underlying business itself is impermissible, or where the company’s support for grave wrongdoing is direct and substantial, purification alone is insufficient. In such a case, the correct response is not merely to purify while continuing to hold. Rather, the investor should avoid new investment, exit the position in a reasonable manner, and purify any impure income already received during the period of ownership.
Where Is the Line?
A practical and defensible framework therefore requires a clear threshold.
Quantitative and Qualitative Tests
That threshold may be assessed using both quantitative and qualitative considerations. Quantitative factors may include the proportion of revenue, assets, contracts, or portfolio exposure connected to the wrongdoing. Qualitative factors include whether the company’s support is indispensable to the wrongdoing, intentional, ongoing, and whether the resulting harm is severe.
Why a Threshold is Needed
This article does not attempt to define that threshold. Rather, it argues that without some threshold, the analysis risks becoming either too lenient, because it ignores genuine complicity, or too extreme, because it treats every remote connection as legally prohibited. This is the crux of the matter: the Shariah compliance of a portfolio ultimately depends on such a threshold, yet many contemporary screening methodologies set quantitative limits on impermissible income and financial ratios, without a comparable threshold for an investor’s complicity in grave wrongdoing, while often treating questions of complicity as matters of individual ethical scrupulousness (waraʿ) rather than formal legal screening criteria.
Funds Add a Layer: When You Own Units, Not Direct Stocks
Investing through a Shariah-compliant fund introduces an additional layer of complexity. The investor owns units in the fund, while the fund owns the underlying shares.
Relying on the Shariah Board
If one of the underlying companies becomes non-compliant under the fund’s Shariah methodology, the fund manager or Shariah Board should deal with it in accordance with the fund’s stated investment and purification policies. Ordinarily, investors may rely on the expertise of a qualified Shariah Board, particularly where they lack the knowledge or resources to independently assess every holding.
When a Stricter Personal Standard Applies
However, some investors may choose to adopt a stricter personal standard. If an investor is reasonably satisfied, based on reliable evidence that the fund holds companies materially complicit in grave wrongdoing, the investor may choose, and in some cases may be required, to avoid or exit that fund.
The guidance below provides a general Shariah framework. Its application may differ depending on the facts of each case, the fund’s screening methodology, and the views of qualified Shariah scholars.
So What Should an Investor Actually Do?
The practical answer may therefore be stated as follows.
When to Dispose
Where the investment is directly, materially, and demonstrably complicit in grave wrongdoing, and a qualified Shariah authority concludes that it crosses the threshold of prohibited assistance, the investor should refrain from making further investments and exit the position as soon as reasonably practicable. Any impure income already received should also be purified. It is also worth noting that purification should never be used to justify maintaining an investment that is itself impermissible.
When to Purify and Hold
If the exposure is instead minor, indirect, incidental, or falls within a recognised Shariah screening methodology, the investment is not automatically rendered impermissible. In that case, the investor should purify the relevant impure portion according to the fund’s published purification figure or another reliable method of calculation. The investor may nevertheless choose to divest as an act of waraʿ, solidarity, or ethical preference where a suitable alternative exists. As Imam al-Zarkashi relates:
لَمْ يَحْرُمِ الشِّرَاءُ مِنْهُ، بَلْ يَجُوزُ الْأَخْذُ مِنْهُ، إِلَّا أَنْ يَقْتَرِنَ بِتِلْكَ الْعَيْنِ عَلَامَةٌ تَدُلُّ عَلَى أَنَّهَا مِنَ الْحَرَامِ؛ فَإِنْ لَمْ يَقْتَرِنْ فَلَيْسَ بِحَرَامٍ، لَكِنَّ تَرْكَهُ وَرَعٌ مَحْبُوبٌ وَإِنْ كَانَ مَحْصُورًا
“Purchase from him is not unlawful; rather, taking from him is permitted, unless that specific item is accompanied by an indication that it is derived from the unlawful. If no such indication exists, it is not unlawful. Nevertheless, refraining from it is a commendable act of scrupulousness (waraʿ), even where the unlawful element is limited and identifiable.” (Al-Zarkashi, al-Manthūr fī al-Qawāʿid al-Fiqhiyyah)
This should not be confused with declaring the entire fund impermissible as a general ruling. An investment may be legally permissible while still being something a Muslim chooses to avoid out of greater caution. That space, between “permissible” and “better to avoid”, is the domain of scrupulousness (waraʿ). It should not be turned into a ruling of prohibition without sufficient evidence and juristic justification.
When Both Are Needed
In certain cases, both responses may be appropriate: the investor exits the investment while also purifying any impure income previously received.
When the Facts Are Unclear
Where the facts remain uncertain, the investor should not rush to declare the fund impermissible. Instead, he should carefully consider the available evidence. This includes considering the extent of the company’s involvement, the size of the holding within the fund, the conclusions reached by the fund’s Shariah Board, and the availability of suitable alternatives. Where doubt remains but the moral concern is substantial, a cautious investor may choose to exit. Others may reasonably rely on the judgement of a qualified Shariah Board while continuing to monitor developments and purify any incidental non-permissible income. Both approaches may be defensible when based on sincere ijtihād, reliable evidence, and a genuine desire to avoid wrongdoing.
The Boycott Question: Ethics, Capacity, and Public Interest
The question of boycott should be understood separately from Shariah screening. Boycott primarily operates within the ethical and public-policy dimensions of the Shariah, drawing upon considerations of maṣlaḥah (public interest), solidarity with the oppressed, and sadd al-dharāʾiʿ (blocking the means to harm). In certain circumstances, it encourages Muslims to refrain from otherwise lawful economic choices in order to avoid strengthening oppression and to exert social, economic, or political pressure. Its application depends on a person’s circumstances, capacity, expected benefit, and the availability of practical alternatives. Allah reminds us:
فَٱتَّقُوا۟ ٱللَّهَ مَا ٱسْتَطَعْتُمْ
“So be mindful of Allah as much as you are able.” (Qurʾan 64:16)
Additionally, the Shariah binds obligations to a person’s capacity. The Prophet ﷺ said:
«فَإِذَا نَهَيْتُكُمْ عَنْ شَىْءٍ فَاجْتَنِبُوهُ، وَإِذَا أَمَرْتُكُمْ بِأَمْرٍ فَأْتُوا مِنْهُ مَا اسْتَطَعْتُمْ».
“If I forbid you to do something, then keep away from it. And if I order you to do something, then do of it as much as you can” (Sahih al-Bukhari, 7288)
In the context of investing, this means that Muslims are expected to fulfil their obligations – such as Shariah screening, purification, and avoiding clearly impermissible investments – to the best of their knowledge and ability. At the same time, where an investment is clearly established to involve prohibited complicity, it should be avoided. This principle protects against two extremes: neglecting genuine obligations on one hand, and imposing burdens beyond what the Shariah requires on the other. Accordingly, a Muslim who has practical access to ethical alternatives may bear a greater responsibility to avoid materially complicit investments than someone genuinely constrained by necessity, employment, geography, or market limitations.
Conclusion
In summary, the answer is neither “always sell” nor “always purify”. Divestment is appropriate where an investment is directly and materially complicit in grave wrongdoing, based on reliable evidence and the assessment of a qualified Shariah authority. Purification remains appropriate where the impermissible element is incidental within an otherwise Shariah-compliant screening framework. In some cases, both responses may be required: exiting the investment while purifying any impure income already received. In others, purification and continued monitoring may suffice, while voluntary divestment remains a commendable act of waraʿ where suitable alternatives exist.
Whatever position one ultimately adopts, a Muslim should never become indifferent to oppression. The Prophet ﷺ taught that wrongdoing should be opposed according to one’s ability: through action where one possesses authority, through speech where one is able to speak, and at minimum through rejection in the heart:
مَنْ رَأَى مِنْكُمْ مُنْكَرًا فَلْيُغَيِّرْهُ بِيَدِهِ، فَإِنْ لَمْ يَسْتَطِعْ فَبِلِسَانِهِ، فَإِنْ لَمْ يَسْتَطِعْ فَبِقَلْبِهِ، وَذَٰلِكَ أَضْعَفُ الْإِيمَانِ
“Whoever among you sees an evil, let him change it with his hand. If he is unable, then with his tongue. If he is unable, then with his heart—and that is the weakest of faith.” (Ṣaḥīḥ Muslim, 49)
The weakest level of faith is not presented as an ideal, but as the minimum response when stronger forms of action are genuinely beyond a person’s ability. Accordingly, investors should combine careful Shariah analysis with moral responsibility: avoiding clear complicity, purifying incidental impermissible income, supporting better alternatives where available, and refusing to normalise grave injustice.
Regardless of the legal conclusion reached, a Muslim should always strive to avoid doubtful matters where reasonably possible. As the Prophet ﷺ advised:
دَعْ مَا يُرِيبُك إلَى مَا لَا يُرِيبُك
Leave that which makes you doubt for that which does not make you doubt.” (At-Tirmidhi, 2518; An-Nasa’i, 5711)
Financial returns, even where legally permissible, should never come at the expense of one’s moral conscience.
Wallahu Aʿlam.
References:
- Al-Nawawī. Al-Majmūʿ Sharḥ al-Muhadhdhab.
- Ibn ʿĀbidīn. Radd al-Muḥtār ʿalā al-Durr al-Mukhtār.
- Al-ʿIzz ibn ʿAbd al-Salām. Qawāʿid al-Aḥkām fī Maṣāliḥ al-Anām.
- Al-Zarkashī. Al-Manthūr fī al-Qawāʿid al-Fiqhiyyah.
- AAOIFI Shariah Standards No 21 and 26
- Dow Jones Islamic Market Index. Methodology.
- S&P Dow Jones Indices. Shariah Indices Methodology.
- Journal of Shariah, University of Malaya. “Konsep Iʿānah ʿalā al-Maʿṣiyah dalam Islam.” Available at: https://ejournal.um.edu.my/index.php/JS/article/view/68979/19761
- INCEIF Muzakarah 2025 Conference Paper. “Konsep Iʿānah ʿalā al-Maʿṣiyah dalam Islam.” Available at: https://muzakarah.inceif.edu.my/kertas-kerja-slide/2025/Sesi%203_Dr%20Mahbubi%20(paper)_Konsept%20I’anah%20ala%20Al-Ma’syiyah%20dalam%20Islam.pdf
- Islamic Finance Guru. Are Islamic Investment Funds Complicit in Genocide?
- SeekersGuidance. Can We Trust Sharia-Compliant Funds That Invest in Ethically Controversial Companies?
- SharLife Malaysia. How to Purify Shariah Non-Compliant Investments.
- Bursa Malaysia. FAQs on Shariah Non-Compliant Securities.
- Securities Commission Malaysia. Shariah-Compliant Securities Screening Methodology.
