Buying shares in the Kayan company

Question

Praise be to Allah.

The Kayan company is active in petrochemical manufacturing
which is a permissible kind of activity. Its capital is 15 billion riyals
and it does not have any debts at the moment, but it has signed an agreement
with a group of banks to obtain financing for 4.8 billion riyals to cover
the cost of project building. According to what is mentioned in their
prospectus, some of this financing is in the form of loans with interest
from riba-based banks, although the larger part of it will be through
Islamic investment.

This website adopts the opinion that it is haraam to buy
shares in companies that deal with haraam, whether borrowing or lending,
even if their activities are permissible in general. See the answer to
question no. 45929.

Among those who have ruled that it is haraam to buy shares in
the company mentioned is Dr. Muhammad al-‘Usaymi (may Allaah preserve him)
who said:

The activities of this company are in petrochemical
manufacturing, which is a permissible activity and is essential to the Saudi
economy. I have read the prospectus and it is clear to me that the company
does not at the present time have any haraam loans or investments, rather it
states that the money it has in the bank is 15 billion riyals in Islamic
investments that gives a return of 4.5%. I am well known for having
reservations about the way many commercial banks offer Islamic products
through “Islamic service counters” in the form of investments that are not
based on proper shar’i guidelines, rather they are superficial in many of
their operations, especially when the money involved is huge amounts that
the available investment products cannot fully absorb. Still, I appreciate
such blessed efforts and believe that they are a step in the right
direction. But the prospectus has declared the company’s intention to take
both interest-based and Islamic loans from commercial banks. Although the
prospectus expresses thanks that Islamic banks and local, regional and
international banks, in addition to some governmental and semi-governmental
bodies, are expected to contribute to the financing of this project,
focusing on increasing the share of the Islamic banks in financing, the news
mentioned on the website confirms that the company is taking this direction
in borrowing and that the financing will not be purely Islamic.

Because this prospectus, as far as I am concerned, is a
proposal from the company to potential investors, and as it contains what
has been mentioned above, I think that it is not right for a Muslim to be a
part of this contract or to accept it or appoint someone to act as his agent
in such dealings.

Based on that, it is not permissible to invest in this
company.

I would like to take this opportunity to call on the people
in charge of this company and others to avoid haraam loans and haraam
investments. Islamic alternatives – praise be to Allaah – are available and
are sufficient. I would also like to remind them to fear Allaah with regard
to that which has been entrusted to them and about which He will ask them on
the Day of Resurrection. And Allaah knows best. May Allaah send blessings
and peace upon our Prophet Muhammad and all his family and companions. End
quote from the shaykh’s website:

http://www.halal2.com/ftawaDetail.asp?id=13561

And Allaah knows best.