Author:
Astrie Krisnawati
Affiliation:
Faculty of Economics and Business, Telkom University, Jl. Telekomunikasi Terusan Buah Batu, Bandung and Indonesia, Indonesia
Keyword(s):
Ponzi Scheme, investment, Good Corporate Governance, Islamic shari’a.
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 Sche
me-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.
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