Ponzi Scheme: A Violation Against Good Corporate Governance and Islamic Concept on Investment

Astrie Krisnawati

2017

Abstract

There have been many cases of investment fraud, both in a national and global scale, that use Ponzi Scheme as the basis of calculation to attract a great number of investors. However, in the end it caused many victims who suffered losses. The investment practice of Ponzi Scheme which is potentially harmful to investors is a violation of Good Corporate Governance based on applicable state law, as well as a contrary to the principles of investment based on Islamic shari’a, in which the concept of investment should essentially be beneficial to all parties and should not harm anyone. The Ponzi Scheme-based business is rife in Indonesia. It is an ironic phenomenon that most of Indonesia’s populations are Muslim. Applying a qualitative method through content analysis of applicable rules and investment principles, this conceptual paper aims to describe and identify violations of the Ponzi Scheme against legal regulation and Islamic shari'a of investment. This study found that The Ponzi Scheme-based investment is a violation of Good Corporate Governance principles of transparency, accountability, responsibility, and fairness, as well as a violation of Islamic law in terms of ignoring the values of honesty and fairness by harming the investors and violating the rules on usury and gambling.

Paper Citation

in Harvard Style

Krisnawati A. (2017). Ponzi Scheme: A Violation Against Good Corporate Governance and Islamic Concept on Investment.In 1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP, ISBN 978-989-758-315-5, pages 181-186. DOI: 10.5220/0007079001810186

in Bibtex Style

@conference{iciebp17,
author={Astrie Krisnawati},
title={Ponzi Scheme: A Violation Against Good Corporate Governance and Islamic Concept on Investment},
booktitle={1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP,},
year={2017},
pages={181-186},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0007079001810186},
isbn={978-989-758-315-5},
}

in EndNote Style

TY - CONF

JO - 1st International Conference on Islamic Economics, Business, and Philanthropy - Volume 1: ICIEBP,
TI - Ponzi Scheme: A Violation Against Good Corporate Governance and Islamic Concept on Investment
SN - 978-989-758-315-5
AU - Krisnawati A.
PY - 2017
SP - 181
EP - 186
DO - 10.5220/0007079001810186