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By MAHMOOD SANGLAY
A halal label can lower an investor’s guard precisely when vigilance is most needed. Recent cases show how faith, community endorsements and promises of exceptional returns may be engineered to convert religious trust into financial loss.
The danger has a name: affinity fraud. It targets people through a bond they already trust – religion, family, ethnicity or community. The promoter does not first sell an investment. He sells belonging, piety and familiarity. When these replace due diligence, “halal” can become camouflage.
A local warning
South Africans need not look abroad for the stakes. In July 2026, Muslim Views reported that former Amaanat Investment Holdings chief executive Hussun Abdool Khalek Omar had appeared in the Durban Specialised Commercial Crimes Court on charges including fraud, alternatively theft, and money laundering involving R45 million. Bail of R200 000 was granted.
The criminal prosecution is separate from civil arbitration over R646 million in disputed payments. Omar has not pleaded; the allegations remain untested and he is presumed innocent. The case is not proof that Islamic investment is defective. It is a grave warning that Islamic branding, communal identity or a Muslim board cannot replace independent controls. Savers deserve to know who holds their money, who authorises payments and whether accounts are independently audited.
The public-interest harm reaches beyond individual losses. When retirement savings, widows’ funds or family capital disappear, dependants and community welfare organisations may carry the consequences. Shame can also silence victims, allowing promoters to exploit loyalty and recruit again. Reporting doubts early protects others; it does not betray the community.
The Financial Sector Conduct Authority’s Regulatory Actions Report 2025/26 says unregistered offerings repeatedly displayed promises of unrealistic returns, guaranteed capital or profits and social-media promotion (p 27, para 16.1). Its Bhaca Green case study records promised forex returns of 20% monthly, later 10%, and calls guaranteed online-trading returns a continuing threat to retail investors (pp 33–34). The use of Arabic terminology does not neutralise these warning signs.
The international pattern
In the United States, Instagram personality Jebara Igbara, known as Jay Mazini, was sentenced on April 24, 2024, to 84 months’ imprisonment for fraud and money laundering. The US Attorney’s Office said his Halal Capital Ponzi scheme targeted New York’s Muslim community, purportedly investing in shares, electronics and personal protective equipment. Instead, Igbara misappropriated nearly all the money for personal expenses, luxury vehicles and gambling. Losses from his overlapping schemes exceeded $8 million.
The case explains why visible generosity, religious posts and influencer testimonials prove neither solvency nor Shariah compliance. A US Securities and Exchange Commission investor alert says affinity fraud exploits trust within religious and other groups and warns investors against relying on testimonials or celebrity endorsements.
What Islam requires
Allah says: “O you who believe! Do not devour one another’s wealth illegally, but rather trade by mutual consent.” (Sura An Nisa, 4:29) Consent procured through invented profits, concealed risks or false approval is not meaningful consent.
The Prophet Muhammad ﷺ found dampness hidden beneath a trader’s heap of grain. He asked why it was not placed on top where buyers could see it, then declared: “Whoever deceives us is not one of us.” (Sahih Muslim, hadith 102) Disclosure, not religious appearance, is the test of honest trade.
Imam Al Ghazali placed preservation of property among Shariah’s five essential objectives, alongside faith, life, intellect and progeny. Protecting wealth therefore means more than avoiding riba; it requires truthfulness, sound governance and prevention of harm.
Mufti Muhammad Taqi Usmani explains in An Introduction to Islamic Finance that musharakah profit must be an agreed share of actual profit, not a fixed sum or rate tied to capital (p 23). The same rule applies to mudarabah (p 33). Anyone promising fixed, exceptional “profits” without explaining how loss may occur may be offering neither genuine risk-sharing nor a credible business.
Six checks before investing
First, verify the exact legal entity and its authorised representatives. In South Africa investors may search the FSCA register directly; never trust a licence number printed on promotional material. Confirm that authorisation covers the particular service and product. Company registration alone is not permission to provide financial services.
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Second, identify the custodian and bank account. Client money should not enter a promoter’s personal account or an unrelated company. Contact the bank, custodian or regulated administrator using details obtained independently.
Third, demand recent, independently audited financial statements, not spreadsheets, screenshots or testimonials about payments. Verify the auditor or audit firm through the Independent Regulatory Board for Auditors’ official register and examine whether the audit opinion is qualified, late or incomplete.
Fourth, investigate the Shariah board. Obtain the signed ruling, its date and precise scope. Contact every named scholar independently. Did the scholar review only a contract, or also the business model, accounts, custody and continuing operations? A fatwa is not an audit, licence or guarantee.
Fifth, test the returns. What identifiable asset, trade or service produces them? Why are distributions stable while markets fluctuate? Can promoters produce contracts, invoices, inventory records and bank evidence? Ponzi schemes use later deposits to pay earlier participants; punctual early payments may deepen the deception.
Sixth, examine exits and governance. Who may authorise withdrawals? Are duties separated? Is there an independent board, complaints process and annual report? Secrecy, pressure, unexplained urgency or hostility towards questions are reasons to stop.
Endorsement creates responsibility
Scholars and community leaders cannot reasonably lend their names, mobilise trust and disclaim all responsibility later. Before endorsing, they should investigate competence, conflicts, remuneration and governance. Any statement should specify what was examined, with what evidence and for how long. If warning signs emerge, endorsers must promptly correct the public record.
Investors, too, carry responsibility: piety does not cancel prudence. Report suspected unauthorised activity to the FSCA and alleged crimes to the police. Preserve contracts, messages, advertisements and bank records. Do not recruit relatives while doubts remain.
A genuine halal investment can explain where money goes, how profit arises, who bears loss and who independently checks every claim. When reasonable questions are treated as disloyalty, the label has ceased to protect faith. It has become the weapon used against it.
