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Critical analysis of beneficial ownership in mushārakah based home financing in Malaysia

Nik Abdul Rahim Nik Abdul Ghani (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Ahmad Dahlan Salleh (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Amir Fazlim Jusoh @ Yusoff (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Mat Noor Mat Zain (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Salmy Edawati Yaacob (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Azlin Alisa Ahmad (Research Centre for Sharia, Faculty of Islamic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia)
Muhammad Yusuf Saleem (Islamic Banking and Financial Services Department, Central Bank of Afghanistan (Da Afghanistan Bank), Kabul, Afghanistan)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Article publication date: 15 February 2021

Issue publication date: 7 June 2021

287

Abstract

Purpose

This paper critically aims to examine the concept of beneficial ownership and its application in musharakah-based home financing.

Design/methodology/approach

The study applies the method of juristic interpretation in analyzing the meaning of beneficial ownership in legal documentation of musharakah-based home financing. This qualitative study uses content analysis approach that investigates the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in musharakah-based home financing from the Islamic perspective.

Findings

The result finds that beneficial ownership is considered a true ownership, as Shari’ah allows the transfer of ownership based on the offer and acceptance in a contract. Furthermore, the absence of legal registration does not mean the absence of true ownership, whereas all documentations and agreements have clearly stated rights and liabilities of each contracting parties.

Originality/value

This paper provides a fiqhi discussion of analyzing beneficial ownership in musharakah-based home financing. It shows that Shari’ah parameters are essential for the use of beneficial ownership to ensure its compliance with the Shari’ah requirements of milkiyyah (ownership).

Keywords

Acknowledgements

This research paper is sponsored by the Malaysian Ministry of Higher Education under the Fundamental Research Grant Scheme entitled “Pembinaan Parameter Syariah Prinsip Pemilikan Bermanfaat (Beneficial Ownership) dalam Kewangan Islam” (The Development of Shari’ah Parameters for the Principle of Beneficial Ownership in Islamic Finance) under FRGS/1/2015/SS01/UKM/03/2 fund and the Geran Galakan Penyelidikan Muda (GGPM-2018–007), Universiti Kebangsaan Malaysia, entitled “Aplikasi Takaful Mikro Melalui Dana Zakat” (Application of Microtakaful Via Zakat Fund).

Citation

Nik Abdul Ghani, N.A.R., Salleh, A.D., Jusoh @ Yusoff, A.F., Mat Zain, M.N., Yaacob, S.E., Ahmad, A.A. and Saleem, M.Y. (2021), "Critical analysis of beneficial ownership in mushārakah based home financing in Malaysia", Qualitative Research in Financial Markets, Vol. 13 No. 2, pp. 161-182. https://doi.org/10.1108/QRFM-01-2020-0003

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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