Preference Shares from Shariah Perspective : Issues and Solutions

Shamsiah Mohamad; Mezbah Uddin Ahmed; Mohd Bahroddin Badri

doi:10.12816/0045781

Article Details

Preference Shares from Shariah Perspective : Issues and Solutions

Authors:

Shamsiah Mohamad | Mezbah Uddin Ahmed | Mohd Bahroddin Badri

Publisher:

The Faculty of Economics and Muamalat

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

The Journal of Muamalat and Islamic Finance Research 2017 Vol.14 Issue 2, pp.93-110

Document Type:

Article

Publication Date:

12/2017

Document Language:

English

Document ID (Org No.):

116222

Frequency:

Annual

pISSN:

1823075X

DOI:

10.12816/0045781

Descriptors:

Keywords:

Abstract:

 Preference shares have their own characteristics that make them different from ordinary shares. Moreover, they can be divided into various types based on unique features embedded in each type. This paper aims to scrutinise the different types of preference shares to identify related Shariah issues and subsequently propose solutions for the identified issues that would help in structuring Islamic preference shares. This paper employs a qualitative method by analysing relevant documents and literature to understand the subject-matter and Shariah-related issues. This paper finds that several features of conventional preference shares make the instrument as Shariah non-compliant. These are; (i) capital guarantee; (ii) loss sharing disproportionate to capital contribution; (iii) fixed profit; (iv) profit guarantee; and (v) waiving of right prior to realisation of profit. It is noted that there are a few articles discussed on preference shares. Nevertheless, this paper is significantly different from the others in term of in-depth analysis for each type of preference shares and the proposed Shariah-compliant solutions.

Article Details

Preference Shares from Shariah Perspective : Issues and Solutions

Authors:

Shamsiah Mohamad | Mezbah Uddin Ahmed | Mohd Bahroddin Badri

Publisher:

The Faculty of Economics and Muamalat

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

The Journal of Muamalat and Islamic Finance Research 2017 Vol.14 Issue 2, pp.93-110

Document Type:

Article

Publication Date:

12/2017

Document Language:

English

Document ID (Org No.):

116222

Frequency:

Annual

pISSN:

1823075X

DOI:

10.12816/0045781

Descriptors:

SHARES

SECURITIES

PARTNERSHIP

ISLAMIC LAW

ISLAMIC BANKING

Preference Shares

Mushārakah

Shariah Issues

Issues

Article Details

Authors: Shamsiah Mohamad | Mezbah Uddin Ahmed | Mohd Bahroddin Badri

Publisher: The Faculty of Economics and Muamalat

Main Topics: Islam, Bábism & Bahá"í Faith

Journal: The Journal of Muamalat and Islamic Finance Research 2017 Vol.14 Issue 2, pp.93-110

Document Type: Article

Publication Date: 12/2017

Document Language: English

Document ID (Org No.): 116222

Frequency: Annual

pISSN: 1823075X

DOI: 10.12816/0045781

Descriptors:

Issues

Authors:

Shamsiah Mohamad | Mezbah Uddin Ahmed | Mohd Bahroddin Badri

Publisher:

The Faculty of Economics and Muamalat

Main Topics:

Islam, Bábism & Bahá"í Faith

Journal:

The Journal of Muamalat and Islamic Finance Research 2017 Vol.14 Issue 2, pp.93-110

Document Type:

Article

Publication Date:

12/2017

Document Language:

English

Document ID (Org No.):

116222

Frequency:

Annual

pISSN:

1823075X

DOI:

10.12816/0045781