What to Do When Your Shariah-Compliant Shares Become Non-Compliant after Merger?

The Problem

When a Shariah-compliant company merges with or is acquired by a non-compliant company, you receive shares in a non-compliant entity. What should you do?

The Shariah Ruling

• Sell Immediately: Dispose of non-compliant shares as soon as possible.
• Keep Your Original Capital: The amount you originally invested is yours to retain.
• Pre-Merger Profits: Capital gains and dividends earned while compliant are halal and may be kept.
• Post-Merger Profits: All gains, capital appreciation, and dividends earned after the company becomes non-compliant must be donated to charity.
• If You Delay: All profits during the holding period must be donated.

Purification of Compliant Stock Dividends & Gains

Even with compliant stocks, you must purify any questionable income:

• If a Shariah-compliant company has even small amounts of haram income, you are responsible for donating your proportionate share to charity.
• Use the IslamicStock App’s Purification Calculator: This tool is available for all stocks and automatically calculates the exact amount you need to donate based on your gain and the company’s income sources.
• Simply input your gained income details, the app will show you the purification amount instantly.

Quick Reference