Unravelling the Deceptive Threads: A Critical Analysis of the Konya Model in Islamic Finance

This article deals with a system of Islamic investments base on what was termed “the Konya” model, which became widespread among Turks in Europe during the 1980s. The aim of this chapter is to show how this model worked and assured many thousands of Muslim investors in good faith that the holding companies behind it operated within the framework of Islamic ethics. The founders of the holding companies used irrational promises of high returns to attract investors and were successful in this strategy. The recruitment often took place in European mosques. But at a certain point, bankruptcy occurred, and the investors lost all of their money or almost all of it. The literature shows that there have been other similar cases in Islamic finance globally. However, the Konya model leads in terms of the extent of the losses with 25 billion euros. There are still unanswered questions because there is an unfortunate lack of transparency regarding this topic and it can neither be proven that there was fraud on the part of the senior employees of the financial holding companies nor that the companies were driven into bankruptcy due to political influence.