الحمد لله رب العالمين
والصلاة والسلام على من بعث رحمة للعالمين
وعلى آله وصحبه اجمعين
Assalāmu Alaykum Warahmatullāh Wabarakātuh
Respected brothers and sisters, You are all welcome to this session of the Halqah.
As discussed, we are going to be discussing on the MMM tonight as promised Bārakallāhu fīkum
The Ulamā have said:
الحكم على شيء فرع عن تصوره
“The Ruling of a thing is a necessary derivation from its conceptualization.”
What that means is that; Before a Ruling is passed in the Sharī’a, the Muftī must thoroughly understand the matter well. Therefore, we would firstly need to understand excellently what MMM is in reality. May Allah ease our affairs, aameen
I say, seeking Allah’s help, that the MMM which took its name from the first letters of the names of three founding brothers in Russia: Sergei Mavrodi, Vyacheslav Mavrodi, and Olga Melnikova, is a network based on the Ponzi Scheme. It was founded as a company in 1989 firstly importing computers and office equipments.
After venturing into one or more other roles, the MMM company kept falling into failures that it moved into the Ponzi Scheme attracting investments from private investors and promising 1000% returns annually. In 1994, the result was that MMM’s Ponzi Scheme was a great success drawing in thousands and thousands of investors even in three months of operation. It relied heavily on advertisements and word of mouth invitations rather than quotations of stock on the stock markets.
Other similar companies soon rose copying in the same Ponzi Scheme. And MMM now had a number of subsidiary companies doing same business. It suffices here to mention that by July 1994 after attracting millions of investors and making much money, Russian Authorities closed the offices of the MMM for Tax Evasions. This resulted into the loss of money for investors who were owed as much as 1.5billion USD.
The Russian Media outlets mentioned that over 50 investors who lost their monies as a result committed suicide. In 1997 the company declared bankruptcy and the main founder Mavrodi was arrested and charged for fraud in 2003.
In 2015, MMM began operating in South Africa claiming 30% return per month through a social financial network. The state authorities in South Africa were against the Scheme and identified it as a pyramid scheme. After series of protests by supporters of the Scheme in South Africa, it has finally reopened late this November 2016.
In November 2015, the MMM came into Nigeria opening its official website and declaring same 30% per month return, and targeting the unemployed youths. As at late this year, they have recorded close to 2.5 million Nigerians as signed into the scheme. EFCC says it is monitoring the scheme closely. As for China, its Government took the initiative before regrets by banning it as a Ponzi Scheme this last January.
Hmmmmmmm, brothers and sisters, perhaps we should ask ourselves to take a minute to understand what a Ponzi Scheme is.
A Ponzi Scheme is a form of fraudulent investment scheme whereby an individual, a company or firm pays back investors from generated new capital.. What is meant here is that a company invites investors and then promises them a percent profit within a period but does not generate this profit from any other source aside the money it collected from new investors. In other words, it takes money from an individual and then gives it to another individual in the name of investments and returns from the investment plus profit.
It is named after one Charles Ponzi who tremendously used it in 1920 as a technique to earn money and salvage his collapsing company from huge debts. Ponzi Schemes end up doing no business at all.
They just merely collect other people’s money and put it in other people’s coffers plus added money. For this reason, it cannot be called an investment. Ponzi Schemes have lots of risks attached to it. Of them is that since it relies solely on new investments, it collapses once new investments slows down. And then the monies of old investors get stuck.
Secondly, most times, as the Russian experience shows, the Promoters later vanish away with what is left of the monies. There are so many examples of Ponzi Schemes in history and the MMM is one of them.
That said, let us return to the MMM itself and seek a conceptualization of it from its own mouth.
On the Nigerian MMM Website, it says on What is MMM? the following:
“MMM is not a bank, MMM does not collect your money, MMM is not an online business, HYIP, investment or MLM program. MMM is a community where people help each other. MMM gives you a technical platform which helps millions of participants worldwide to connect those who NEED help to those who are ready to PROVIDE help, for FREE.”
This is nothing but a promotional message meant to disguise the reality behind it.
How then does it function? A participant ‘invests’ his money and gets 30% compound interest on what he ‘invested’.
It is clearly mentioned that this 30% is taken from the money that came from new ‘investors’.
What then is the word of the Sharī’a on this form of business?
It is Harām. Why?
For the following reasons:
1. Islām does not allow for any anonymity in transactions. For the most part, the scheme does not come plain with who its organizers are.
2. The ‘investor’, better called the ‘lender’ does not get the details of the so called ‘Network’.
3. There are no guarantees for his money and nobody to hold responsible if his money fails.
All of these fall into what is known as ‘Al-Bay’u Al-Gharar’ which the Rasūl – salallāhu alayhi wasallam – forbade emphatically. It was recorded in Sahih Muslim:
نهى رسول الله صلى الله عليه وسلم عن بيع الحصاة وعن بيع الغرر. رواه مسلم
“The Messenger of Allāh – salallāhu alayhi wasallam – forbade the transaction of stone-lots, and the transaction of deception.”
It was narrated by the illustrious Companion Abū Hurayrah – radiyallāhu ‘anhu
Imām An-Nawawī – rahimahullāh – said in the Majmū’:
((وأما النهي عن بيع الغرر فهو أصل عظيم من أصول كتاب البيوع، ولهذا قدمه مسلم، ويدخل فيه مسائل كثيرة غير منحصرة؛
“As for the prohibition of the Transaction of Deceit, it is a great Principle among the Principles of the Kitāb of Transactions. And for this reason, Muslim brought it first (in his Sahīh). Falling under this category are several matters that cannot be counted.”
4. It is a form of Lender-Borrower relationship, regardless of what the promoters call it.
That is because no transaction is made. Only exchange of money from hand to hand
Then there is interest of 30%
5. The experiences of other countries where such schemes were allowed to grow and amass followers are bitter ones that must not be experienced again.
Beloved brothers and sisters, this is what has come apparent to us on this matter of the MMM about which numerous questions have been asked and matters raised in this economic discomfort that affects our people. There is no mincing words about it, this is a Harām kind of involvement that a Muslim should not be found engaging in.
In Islām we have our own form of system where the benefits of societal responsibilities are guaranteed. It is called the ‘Takāful’ It is the responsibility of every Muslim society to work hard toward establishing a viable system and network that establishes and achieves this level of financial relief.
Allāh ta’ālā said in the Qur’ān
:وَتَعَاوَنُوا عَلَى البِرِّ وَالتَّقْوَى وَلاَ تَعَاوَنُوا عَلَى الإِثْمِ وَالْعُدْوَانِ
“And assist one another in Piety and Righteousness, and do not assist one another in Sin and Transgression”
The Rasūl – salallāhu alayhi wasallam – said:
إن الله فرض على أغنياء المسلمين في أموالهم بقدر الذي يسع فقراءهم، ولن يجهد الفقراء إذا جاعوا وعروا إلاّ بما يصنع أغنياؤهم، ألا وإن الله يحاسبهم حساباً شديداً ويعذبهم عذاباً أليما”
“Indeed Allah has made obligatory on the Wealthy Muslims a proportion that reliefs the poor ones among them. And the poor ones will not struggle by the lack of food and clothing but by that which was pepertrated by their wealthy ones. And indeed Allāh will hold them to account in a severe way and punish them a painful punishment in its accord.”
This was recorded by Imām Al-Haythamī – rahimahullāh – in Kitābu Az-Zakāt in his book ‘Majma’u Al-Zawā’id’ from the Companion Alī Ibn Abī Tālib – radiyallāhu anh.
And the Rasūl – salallāhu alayhi wasallam – praised the Ash’ari tribe from whom descended the Noble Companion Abū Mūsā Al-Ash’ari Saying:
: “إن الأشعرين إذا أرملوا في الغزو أو قل طعام عيالهم بالمدينة جمعوا ما كان عندهم في ثوب واحد ثم اقتسموه بينهم في إناء واحد بالسوية، فهم منى وأنا منهم”.
“Indeed the Ash’aris, whenever their supplies of food get depleted in war or their family foods get depleted in the cities, they would gather everything that each and every of them have left in one pack and place and then they will share everything within themselves in equality. They are from me and I am from them“
This was recorded by Imām Muslim from Abū Mūsā in the Sahih.
The last wording “they are from me and I am from them” as Ulamā explained is the hallmark of approval from the Rasūl – salallāhu alayhi wasallam – and his showing to us that that is his Sunnah.
We ask Allāh to unite the Ummah and to grant us thabāt on His Dīn in both poverty and wealth.
Bārakallāhu fīkum jazākumullāhu Khayran
Assalāmu alaykum Warahmatullāh Wabarakātuh
سبحانك اللهم وبحمدك اسهد ان لا اله الا الله نستغفرك ونتوب اليك
