Dr Javed Akbar Ansari note on Joint Stock

Note By Javed Akbar Ansari on Joint Stock Money obtained from employees for investment in state/joint venture companies should be on a voluntary basis (no compulsory deductions are permissible). Rate of deductions should be modest. Rate of return should be related to profit/loss of related state owned companies. Employees may be encouraged to agree to a larger investment share of their salaries, however, higher paid workers may be requested to agree to a relatively higher investment share of their salaries. State owned companies should not be called a joint stock company. Joint Stock Company is a capitalist property firm. We recommend that ownership rights and management rights should not be allocated to employee investors. The state owned company should be modarabas where the state has exclusive management control and investors do not participate in management or ownership. A stock market should not be established in Afghanistan. Shares are continually traded in stock market leading necessarily to speculation (gharar). Shares issued to employees should be non-transferable, non-tradable. They should be related to a fixed time period (say a year) during which the owner of the shares must compulsorily hold them. When the time is over and profit/loss is secured they should be liquidated and a fresh batch of shares should be issued to replace them. Values of shares must remain fixed throughout their period of existence. However, rates of profit shares may vary at different times of issue. If the rate of profit share is 5 percent (to be divided among all employee share holders) in accordance with their share holdings, 6 at time of issue it may be raised to 10 percent at second point of issue(a hedge constant ). At time of maturity employee shares may be (a) bought back by the government (b) returned by the employee at the new rate of liquidated profit shares (c) sold to other employees. Ulema must be part of the proposed company to consider issuance of profit shares We strongly insist that a stock market never be established in the IEA. This is a step towards the development of a riba and gharar based economy. The proposal committee should neither consider nor approve the listing of an over the counter market as this is first step towards legitimating capitalist property form. Sale of employee shares should be the exclusive responsibility of concerned government departments. Total amount realized by sale of employee shares should be managed by the Ministry of Economy or the Ministry of Planning or the Ministry of Liquidities. Selection of state companies in which employees funds are to be invested should be based on a national rehabilitation plan of sick industries. Among the priority sectors for investment should be New state owned companies to be established in (a) arms and armament production (specially aircrafts and drone technology) (b) IT sector (c) agricultural sector (specially grain marketing and distribution. Special Request The proposed committee may also consider the possibility of the early issue of an Islami Tamveeli Certificate (ITC) to general public to be managed by Da Bank Afghanistan.

(a) The first issue of ITC should be made on 1st January 2024 (b) ITC should be issued for a fixed duration maturity over a year (or five years) (c) During this period they should be non-tradable (means that a bond market does not exist in the IEA) (d) The rate of return should be linked to an index of production – say GDP if GDP given by 5 percent in 2024. The ITC rate of return should be slightly higher (say 6 percent) if GDP falls by 3 percent. The value of the ITC shares may fall by a lower proportion (say 4 percent).