[ALOCHONA] PM’s son intervenes in Yunus affair :Grameen brushes aside allegations

PM's son intervenes in Yunus affair : Grameen Bank brushes aside allegations

David Bergman

In an intervention in the ongoing dispute between the Bangladesh government and the Grameen Bank, Sajeeb Wajed, son of Bangladesh's prime minister Sheikh Hasina, has accused the bank of 'fraud,' 'theft,' 'tax evasion,' 'draconian' methods of loan recovery and other criminal offences.

In an e-mail, which New Age has confirmed was distributed to international agencies and people of influence including human rights organisations, US state department officials, and his former classmates at the Harvard Kennedy School of Government, Sajeeb directly accuses Muhammad Yunus and his family of 'embezzlement.'

In a detailed rebuttal given to New Age, the Grameen Bank has brushed aside all the allegations, calling them 'completely false,' 'utterly misconceived,' based on 'inaccurate facts' and misleading.

The Friends of Yunus claimed on Tuesday that the 'defamatory' e-mail is 'now exposing fully the dynamic behind the attack [on] Grameen Bank and [Professor] Yunus.'

In the e-mail, Sajeeb, who lives in the United States, calls himself an 'Adviser to Sheikh Hasina, Honorable Prime Minister of Bangladesh.'

He told New Age on Sunday that 'I was indeed the source of this e-mail' and said his main source of the information was two legal documents that 'were prepared by our lawyers.'

The two documents were attached to the e-mail which New Age received earlier this week.Sajeeb went on to tell New Age, 'They were vetted by relevant ministries before being provided to me.'

Sajeeb's comments against Yunus and the Grameen Bank are in direct conflict with a briefing given only in the past week to diplomats and journalists by AMA Muhith, the finance minister.

'The Grameen Bank is an institution in which the government takes great pride,' Muhith said. 'And we believe that the hard and dedicated efforts of the Grameen employees and borrowers under the able leadership of Prof Yunus have earned for the institution the place of honour that it occupies not only in Bangladesh but also abroad.'

The e-mail comes at a time with the government trying to remove Muhammad Yunus from his position as managing director of the Grameen Bank and the High Court on Tuesday upholding the Bangladesh Bank's order of dismissal.

The Bangladesh Bank wrote to the chairman of the Grameen Bank in the past week informing him that Yunus 'has been relieved of the responsibilities of managing director of the Grameen Bank.'

Sajeeb told New Age immediately after the High Court decision on Tuesday, 'Our High Court has ruled that Yunus was holding on to his post illegally and this vindicates us.'

In the e-mail, the main allegation the prime minister's son makes against the Grameen Bank refers back to the Norwegian Television documentary that had claimed in late 2010 that millions of dollars had 'disappeared' from the bank.

Sajeeb himself rejects the conclusion of the Norwegian government's inquiry which cleared the Grameen Bank of any misuse of funds and instead claims that 'approximately "$70 million" of donor money 'transferred out of Grameen Bank' was 'never returned.'

He comments that the 'explanation' given by the Norwegian government following its investigation 'left millions of dollars unaccounted for.'

In a statement to New Age, the Grameen Bank said that in 2003 'not only NORAD's remaining money but 100 per cent of all donors' money to the extent of Taka 3,474,501 million was "transferred back"… to Grameen Bank.'

New Age has seen the financial accounts relating to the year 2003 that note this 'transfer' of money.

The Grameen Bank also says that throughout this period the money had 'always' remained in its bank account, as the transfer of money was only notional, and was used in the way agreed with donors.

Sajeeb also alleges that the Grameen Bank committed 'fraud and theft' as it 'never returned' to the borrowers 'forced savings' that Sajeeb claims microloan borrowers were required to pay to the bank between 1998 and 2002.

In subsequent correspondence with New Age, Sajeeb said, 'This money was supposed to be put into a separate escrow account and paid back to the borrowers after a certain period. During that timeframe this money was not put into a separate escrow account and was never paid back.'

In its statement, the Grameen Bank says that the claim is 'completely false.'

'The truth is, from the beginning of the Grameen Bank's operation, members have been required to maintain a savings account containing 5 per cent of their loan disbursement amount in order to provide for their emergency needs,' the Grameen Bank says.

'This money is credited to the borrowers savings account, which is an interest bearing account and the Grameen Bank has been giving 8.5 per cent interest for the savings.'

The Grameen Bank goes onto say, 'The borrowers are enjoying the benefit of their savings at their convenience and are allowed to withdraw the entire savings without leaving any balance in their accounts. There is no question of not returning the money to the account holders.'

In a direct allegation against Yunus, the prime  minister's son also claims that the 'equity' in a number of private ventures which used donor funds were held 'not by the Grameen Bank, but by Yunus and his family members personally.'

He goes on to state, 'This is completely illegal and constitutes embezzlement.'

Sajeeb told New Age, 'It is my understanding this includes the investment in Grameen Phone as well.'

In response, the Grameen Bank said, 'There had never been any single incident of using the Grameen Bank fund for private venture with or without approval of the Grameen Bank. More importantly, none of the investments in various companies are held by Professor Yunus and his family members personally.'

'Many times in the past, we have made it very clear that Professor Muhammad Yunus does not own any share in any company,' the statement continues.

Sajeeb's e-mail is also highly critical of microcredit. 'Despite the hype,' he says, 'there is no evidence that microcredit has in fact reduced the rolls [sic] of the poor in Bangladesh.'

'Grameen Bank has been in the microcredit business for 30 years, yet Bangladesh remains one of the poorest countries in the world,' he says.

He goes on to say, 'Grameen Bank charges up to 30 per cent in interest rate on loans and up to an additional 10 per cent in "forced savings" to the poorest sections of society.'

Again the Grameen Bank rejects this.

It points to a recent independent analysis of the Grameen Bank's interest rates by an international organisation called MicroFinance Transparency which it says found that the Grameen Bank 'charges 20 per cent Effective Annual Rate (EAR) for its income generating loans, 8 per cent EAR for house building loans, 5 per cent for education loans (payable after completion of the education) and 0 per cent for the loans granted to the struggling members.'

The statement also states that the 'Grameen Bank charges the lowest interest rate in Bangladesh for microcredit.'

'The responsibility to eliminate poverty is not the responsibility of the Grameen Bank alone,' it adds.

Sajeeb asks in his e-mail why the Grameen Bank needs to charge 'such high interest rates to the poor' when it owns 35 per cent equity in Grameen Phone which has annual revenue of over $1 billion and profits of several hundred million dollars a year.

In response to this, the Grameen Bank says, 'It does not in any way own any part of the Grameenphone. Grameen Telecom is the company that owns 33 per cent of Grameenphone.'

The Grameen Telecom's web site states that the company's goal 'is to connect rural Bangladesh through the provision of mobile telephone service by creating micro-enterprises that can both generate individual income and provide whole villages with connectivity.'

In relation to the government's motivation behind its action against Muhammad Yunus, Sajeeb in his e-mail denies that it has anything to do with 'political retribution.'

'Nothing could be further from the truth,' he states. 'Politically [Yunus] is a non-entity in Bangladesh and no threat to any political leader.'

He told New Age, 'My purpose is simply to bring the facts to light and counter the PR campaign being conducted against the government.'

http://newagebd.com/newspaper1/frontpage/10906.html

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