Ivestment pooled: Questionable source of money invested

Q295 :A group of friends decide to pool their resources together and start an investment project in a few years time. However, in the meantime some of them put their savings in a deposit account in a bank, earning interest. The others are worried about that and decided not to earn interest. The agreement is for all of them to put equal amount at the time of starting the project. This means that the second group will put in only what they have earned from their work, while the others will put a portion of interest money in the capital. Is this permissible?

A295 : Suppose a Muslim who has earned all his money from legitimate means wants to start a partnership with a Christian friend, and the two establish a company in which both have equal portions of the capital, can there be any objection to such a partnership? The Christian partner may have earned much or all of his money from sources which may at least be described as "suspicious" from the Islamic point of view. He might have been engaged in a trade which involved the selling of intoxicants or pig meat, etc. Still the partnership with a Muslim is in no way objectionable. That is because the money itself is not contaminated by the way it is earned. It is the action which may be legitimate or forbidden. When this Muslim and his Christian friend enter into their partnership, they should agree clearly that they will have no recourse to any activity which Islam does not approve. As such, all the earning from that partnership would be legitimate for the Muslim as his share of profit. He will not be questioned by Allah about the original source of the money put in by his Christian friend. He will be asked only about the joint activities from the beginning of his partnership. The same applies to this group of friends. When they have pooled their resources together, that signals the starting point. Those of them who had not earned any interest money bring in only legitimately earned money. The others have a portion of their contributions doubtful, or illegitimate, but that is counted against them prior to the partnership. Their friends who did not share in this particular activity will not be questioned about it. If the partnership, when it is formed, abides by the Islamic teachings, then there is nothing wrong with whatever is earned through the whole activity.

Our Dialogue ( Source : Arab News - Jeddah )