F.T. Fatwas: Non-Syariah Complaint Assets; Assets Found But Whose Ownership Cannot Be Ascertained And Discharging Indebtedness To Creditors Or Their Heirs Who Cannot Be Located

Following the 99th meeting of the Federal Territory Syarak Law Consultative Committee on 3O November 2016, the Mufti for the Federal Territories issued three fatwas on 19 August 2021 that were gazetted on 24 August 2021 under P.U.(B) 428/2021, P.U.(B) 429/2021 and P.U.(B) 430/2021. These fatwas provide rulings relating to how Muslims can: 
  1. Manage their non-Syariah compliant assets (i.e., assets acquired against Syarak Law, for example, through riba’, corruption, gambling, gharar and etc); 

  2. Manage assets found by the public whose ownership cannot be ascertained (luqatah); and 

  3. Settle their indebtedness to creditors or their heirs who cannot be located. 
In all of these three categories, the fatwas provide that the assets in question have to be surrendered to the Baitulmal of Federal Territory Islamic Religious Council, Kuala Lumpur (“MAIWP”) who will then distribute the same for the use of Muslims or public benefit subject to the Standard Operating Procedure set by MAIWP.  However, for the assets under categories (ii) and (iii) above, if the owner or a rightful heir makes a claim on the assets, the Baitulmal of MAIWP will return these assets to them.
These three fatwas have an inherently common theme between them namely to redistribute assets in these specific categories for the use and benefit of the poor and the general public.
Further, many Muslim scholars believe that when assets are obtained against Syarak Law (haram) it cannot be used for personal or family interests as these assets are considered to be tainted as they were obtained in a manner against Allah’s will. This issue has received much attention recently by Islamic Religious Councils around the country.  Earlier this year for instance, the Selangor Islamic Religious Council launched a public campaign to encourage and educate Muslims to surrender their non-Syariah compliant assets. In a similar vein, P.U.(B) 428/2021 represents a significant step by the Mufti for the Federal Territories to tackle this issue within the Federal Territories of Malaysia.
Alert by Muhammad Suhaib b. Mohamed Ibrahim (Senior Associate) of the Dispute Resolution Practice of Skrine.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.