The ruling on taking an increase more than the Capital Sum in Real Estate Shareholdings

Question :

A man bought a number of real estate shares. Then he went to get his money back and the owner of the company gave him his money and added 40% to it. So, is that considered Riba or not?

Answer:

If the matter is like what was mentioned, that the owner of the company gave the shareholder his capital sum and added a percentage to it from the capital sum, then the increase is permissible. This is if the shares of the company were evaluated on the day he gave the money and the percentage of profit for every share. Thus, the owner of the company gives him from the profit the amount that is specifically for his shares. Thus, the 40% is from his capital sum (i.e., it is the increased value of the shares). This is permissible and it is not Riba. There is no sale of an unknown product involved, nor is there any deception. Likewise, this increase is permissible if he buys his shares of real estate from the owner of the company and he gets 40% increase of profit due to his shares. May Allâh send blessings and peace upon our Prophet Muhammad, his family and his Companions.

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