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

• Published in: Qualitative research in financial markets Vol. 13; no. 2; pp. 161 - 182
• Main Authors: Nik Abdul Ghani, Nik Abdul Rahim, Salleh, Ahmad Dahlan, Jusoh @ Yusoff, Amir Fazlim, Mat Zain, Mat Noor, Yaacob, Salmy Edawati, Ahmad, Azlin Alisa, Saleem, Muhammad Yusuf
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 07.06.2021; Emerald Group Publishing Limited
• Subjects: Agreements; Banks; Compliance; Endorsements; Financial institutions; Financial services; Islamic financing; Islamic law; Qualitative research; Quran; Registration; United States > US; Malaysia; Musharakah; Ownership; Home financing; Islamic finance; Beneficial
• ISSN: 1755-4179; 1755-4187
• DOI: 10.1108/QRFM-01-2020-0003

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).