Q: The government requested the private sector to set up a fuel importing company (PIL) to achieve economies of scale and hence the fuel companies at the time (BP, Engen, etc) set up company PIL and had equal shareholding in the company. The fuel companies are represented by their members on the board of directors.
Income is generated for this particular company by sourcing fuel and reselling it to the companies. Due to huge sums of monies involved and payment terms availabe PIL puts the cash in 45 days fixed deposits and earns interest. All the shareholders (BP, Engen, etc) receive dividends as shareholders. The current income is 60% from interest and 40% from a margin which is awarded to importers through the regulated pricing struct.
As a fuel company is it:
1) permissible to receive this money
2) if yes can we use it in our company
3) or do we use 40% and dispose 60%.
4) the directors also receive a sitting allowance is it permissible for the director to use this funds personally considering the source of income?
A: It is haraam to earn interest. Muslims should avoid becoming partners or shareholders in such ventures since the majority of the income is from haraam. One should approach the government and explain to them your predicament as Muslim Investors and importance of avoiding interest. May Allah Taala make it easy and provide a completely pure halaal alternative.