Abstract
This study aims to explore the operating mechanism of the Modaraba Scam that emerged as a viable investment opportunity in Pakistan and ultimately unraveled as a mega Ponzi scheme. Thematic analysis of the findings reveal that the scam emerged with the conception of a sharia-compliant business and gained validity by the intermediation of religious clerics. Initially the scam operators paid out substantial profits to attract maximum investment. However, soon after, the profit was discontinued and the agents escaped. This research adds to the literature on fraudulent investment traps and can help in the identification of similar Ponzi schemes in the future.
Keywords
Modaraba, Modaraba scam, Ponzi scheme
DOI
https://doi.org/10.54784/1990-6587.1031
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Recommended Citation
Ullah, I., Ahmed, W., & Ali, A. (2019). Understanding the operating mechanism of the Modaraba scam: Victims’ perspective on a ponzi scheme. Business Review, 13(2), 81-93. Retrieved from https://doi.org/10.54784/1990-6587.1031
Submitted
December 14, 2020
Published
January 03, 2019
COinS
Publication Stage
Published
