His statement, “He may not enter into a profit-sharing arrangement with another person’s capital if this harms the first capital owner and he does not consent”: the subject of “may not enter” is the muḍārib (working partner). Thus, the working partner may not enter into another profit-sharing arrangement using someone else’s capital.

For example, I give a man capital to trade with under a profit-sharing arrangement. He then goes to another person and says, “Give me capital under a profit-sharing arrangement.” Here, the author says that this is not permissible. But when is it impermissible? He says: “if this harms the first capital owner and he does not consent.” If he consents, it is permissible; and if it causes him no harm, it is permissible.

Harm to the first capital owner occurs in one of two ways:

First: the working partner may become occupied with the second partnership to the detriment of the first, where the capital differs.

Second: he may purchase merchandise of the same kind as that for which the first capital owner entrusted him with capital, until the markets are saturated with this type of merchandise and its price falls. All of this is harmful.

An example of this is that I give a man ten thousand riyals in a profit-sharing arrangement to trade in rice, because I know that rice is in demand. He takes it, then goes to another person and takes ten thousand riyals from him in a profit-sharing arrangement to trade in rice. Does this action harm the first capital owner or not?

The answer is: yes, it harms him, because when the market is flooded with rice, prices will fall. Thus, harm is caused to the first capital owner.

But if he takes ten thousand riyals in a profit-sharing arrangement from another person in order to buy cars, and it is known that cars do not affect rice, he may nevertheless become occupied with trading in cars—especially if he knows that their profit is greater. Consequently, he may neglect the first capital owner