Nayeemul Islam Khan
Yunusgate: If you can't convince, create confusionhttp://opinion.bdnews24.com/2011/03/07/yunusgate-if-you-can%E2%80%99t-convince-create-confusion/
March 7, 2011
Dubbed the messiah of microcredit, Dr. Yunus has been (perhaps wrongly) credited with a unique innovation in banking; i.e. banking for the poor. He has received numerous awards including the Nobel Peace Prize in 2006. Hailed as the saviour of the poor and the pioneer of rural women empowerment, the praise and adulation that Yunus has received over last two and half decades by both Western and local elite dwarfs the admiration received by all other Nobel laureates combined. He has definitely made us, the Bangladeshis, extremely proud. We as a nation are forever indebted to Yunus (no pun intended) for his achievement and for giving us one of the most cherished causes of celebration in the history of Bangladesh.
Popularity and respect is something to sneer at and be suspicious of?
Recently, a lot of controversy and confusion have been created surrounding the removal of Dr. Yunus by Bangladesh Bank from the post of managing director of Grameen Bank. In this regard Grameen Bank, Dr. Yunus, and his supporters/friends have adopted a tactic of creating confusion (which is evidently the dominant PR strategy of Dr. Yunus that this article is expected to reveal) among the citizens of the country by orchestrating an aggressive PR campaign both home and abroad. We feel it's about time we looked through these clouds of confusion and clear things up so that we can call a spade a spade.
- What confusion has been caused? Dr. Yunus and his legal team and supporters have argued one single point, that he is legally entitled to stay as MD. It is NIK who is bringing up all other irrelevant issues such as social business, Monica Lewinsky, etc. In fact this comment is 6,500 words long, 90% devoted to irrelevant character assassination. If that's not trying to create confusion, I don't know what is!
One thing must be cleared at the beginning; we have no issues whatsoever with Yunus being the MD of Grameen Bank, provided it is done in a way consistent with the laws. What we are aiming to achieve is to make sure an institution of Grameen's stature is run in a transparent and accountable manner. If Dr. Yunus, Grameen Bank's present board and Yunus' lawyers can prove that everything is done in a transparent, accountable and legal way and the court verdicts in their favour then we would be delighted to welcome Yunus back to his rightful position. However, until proven legitimate, we have every right as citizens of Bangladesh to raise questions regarding the alleged irregularities of one of this nation's most prized public institutions.
- "Until proven legitimate," i.e. the burden of proof rests on Yunus and he is presumed to be in the wrong.
It should be noted that it was Dr. Yunus' choice to establish Grameen Bank as an institution under a government ordinance as a public institution and not to go through all the struggles and pain of a private or non-governmental institution. Institutions like BRAC were formed as a private/non government entity. Unlike Dr. Yunus, Fazle Hasan Abed took all the responsibilities and went through all the troubles of building and growing an institution of BRAC's magnitude and significance all via private initiatives. As Dr. Yunus chose not go along that way, it's not fair for him, now to expect the freedom and flexibility of a private institution while being a government institution. In no way, we deny any of the claims made by Grameen Bank board regarding Dr. Yunus' contribution to the Grameen Bank and his role in building a positive image of our country. We salute him for his unique and priceless contribution.
- In most other contexts, NIK is very disparaging about NGOs and their operating outside the purview of the government. NIK is well known to cut his cloth to the fashion of the time; apparently he does the same with his arguments.
Another minor argument being put forward in defence of Dr. Yunus is, as founder of Grameen Bank, Yunus should be allowed the privilege to relinquish his position in a congenial manner of his liking.
As the finance minister aptly put it, 'it was difficult for me to create a 'congenial environment of his liking'. Factually, it's not true that Dr. Yunus is the founder of Grameen Bank, The government of Bangladesh is.
- Really?
Even if, for argument's sake we accept that Yunus indeed is the founder, questions remain that whether being a founder of any organisation gives one the right to enjoy privileges beyond the law of the land.
Now, if, say, the founder of Mercantile Bank Mr. Abdul Jalil wants the same privilege or the board of directors of the bank decides to appoint him as the chairman for as long as he wishes to remain in the post, violating the banking laws, would we allow it? The Mercantile Bank board may argue, that it was Mr. Jalil who founded the institution, conceptualised it, organised entrepreneurs, raised capital and have been the source of inspiration and beckon light of the leadership of the bank and made the bank such a huge success. They might feel if Mr. Jalil is not made the permanent/lifelong chairman of the bank, the bank may plunge into a crisis and shareholders may feel lost. Would we allow the Mercantile board to take such a decision even if that is prohibited by the law of the land?
- Once again, NIK presupposes the truth of the proposition which is to be proved, that Yunus remains MD in violation of the law of the land.
So what is this 'congenial environment of Dr. Yunus's liking'?
According to a handwritten unofficial letter to the finance minister by Yunus, dated March, 15, 2010, Yunus offered two alternatives.
Option 1
The tenure of the chairman of Grameen Bank which was due to expire on 26 April, 2010, can be extended till 31st December of 2010 and once he would retire, Dr. Yunus can be appointed as the chairman so that the continuity is maintained and the people who work for Grameen Bank do not get depressed by the sudden change in leadership. In that scenario, the current DMD will take over as the MD.
One of the problems with this option is, it assumes that in almost three decades, Grameen Bank has failed to build a reliable successor to Dr. Yunus to head the organisation. And if, as Yunus claims, the current DMD is a competent executive who has been with Grameen from the beginning, then why would we have to wait for nine months to promote her to become the MD?
- What's the hurry? Why not wait 9 months? It is this kind of tendentiousness that makes NIK's piece hard to take seriously.
Option-2
In case Tabarak Hossain, the then chairman who was about to retire, refuses to take the responsibility through an extension offered by the governemnt, any one of the three chosen by Yunus can be made chairman for one year. Yunus even named them in a list according to his preference. His first choice was Mr. Sayeduzzaman, second Dr. Jamilur Reza Chowdhury and third Khaled Shams. When in April 2011 their tenure would end, Yunus suggested that he himself be then made the chairman. It's interesting to note that in both cases, Yunus puts forward his own name as the future and ultimate chairman of Grameen to be effective at a time of his convenience.
- Why shouldn't he? If the finance minister has any objection, he can object, or offer a third alternative. Where does Yunus say that these are the only two options acceptable to him? Unfortunately, the FM never responded.
It's important to note that, the Grameen Bank board did not write that letter or had any meeting where these options were passed as a resolution. This letter is another example of how Yunus has been using/treating the Bank as if it was his private property, owned by him 100 percent. Say for example, the finance minister agreed with one of the options, would it not have to be approved by the Grameen Bank board? And if that's the case, how can Yunus be so sure that the board will agree with whatever alternatives he suggested without taking the board's approval/endorsement first? Does it not clearly indicate that the Grameen Bank board is a puppet/parrot body, totally under autocratic control of Yunus?
- Who says he is sure? He is just giving options. Who says that the board would have to approve? If the board disapproved (or the FM), then it would be back to the drawing board. Where is this ruled out? And even if the board is in general amenable to Yunus, it doesn't mean that it is under his autocratic control any more than any other board to any other MD. Time and again, NIK makes these kinds of inferences and accusations. I'm sorry, but this is not evidence of anything.
How can an employee (MD of the bank) write a personal letter to a finance minister on a matter of such importance to the Bank and show the audacity of putting forward his personal preferences of how the Bank should be governed? Is this the way a transparent and accountable public institution should be run?
- Why shouldn't he? What's so audacious about it? I might as well ask how can a man with no legal background opine on a legal matter, as NIK has done?
And if it is the Grameen Bank board who can decide who would be the MD of the bank without prior approval of Bangladesh Bank, (though according to Section 14(1) Grameen Bank ordinance 1983, "there should be a Managing Director of the Bank who shall be appointed by the Board with the prior approval of the Bangladesh Bank.") then why did Yunus write that letter to the finance minister and request him to choose from one of his two alternatives?
- Yunus has never argued that prior BB approval is not needed for MD appointment, and indeed got that approval in 1990. But this is typical of the dishonest way NIK argues. He asks "if …" … "then why?" where the "if" clause is invalid. The whole question then becomes ludicrous.
Is this because Yunus knew that contrary to the public claims made by both Yunus and the Grameen Bank, the Grameen Bank board does not have the authority to appoint Yunus as the MD without prior approval of Bangladesh Bank?
- Again, no one has said this. Yunus and Grameen have argued that BB does not have the right to remove the MD. It's quite different.
The counter arguments
Getting back to Mr. Anam's arguments, firstly, getting away with some illegal activity for more than 10 years does not justify the illegal action or somehow make it less illegal or punishable offence. It certainly does not exempt someone from the crime/s committed.
- That's not the point at issue. The point at issue is whether we should find it credible that BB did not approve Yunus's appointment when it stayed silent on the matter for 10 years. Once again, NIK twists the argument to suit his needs.
Second, by taking actions against the illegal activities/irregularities/unauthorised actions by Dr. Yunus and Grameen Bank board, the government in fact is enhancing the image of the country by giving out the strong message that there is zero tolerance from present government on corruption and irregularities.
- But we all know this is laughable. Since we know this is laughable, it is equally obvious that the persecution of Yunus is motivated by something other than zero tolerance for corruption. If that was the motivation, why has the government not moved against other far more egregious offenders? I doubt that even NIK believes this argument.
In fact it is Dr. Yunus and his so-called supporters in the form of "Friends of Grameen" or self proclaimed civil society (read elite) leadership of the country through a carefully concerted campaign, who are trying to tarnish the image of Bangladesh by presenting twisted truths and omitting important information to both local and global audience.
- Really?
Take the example of the Norwegian fund controversy. Grameen Bank received a donation from Norwegian government and then transferred the fund to Grameen Kallyan. After that Grameen Bank borrowed from the same fund that was transferred to Grameen Kallyan from Grameen Bank in the first place. This is indeed a unique "banking innovation" where an institution which owns a certain fund can be turned into a borrower of that same fund by some "innovative", "accounting" procedures to earn profit (interest) for a third party organisation which has no right or legal claim over that fund.
- How is this relevant to the matter at hand? In any event, this was done in order to avoid possible taxes (tax avoidance, by the way, is not a crime. It is not the same as tax evasion) and the deal would have ensured that GB ended up with more usable funds. What's wrong with that? As for GK, it is not as though this is Yunus's personal slush fund. It was set up to provide services to the poor. Why should GB not have the right to transfer money to another organization where the transfer will ultimately result in more money staying with GB and the other organization is a non-profit providing services to the poor, i.e. no one is being enriched.
Grameen Bank claims that the matter has been resolved with the Norwegian authoritieso concerned. However, it should be noted that this "transfer of funds" issue has not been resolved in terms of the law of Bangladesh. One of the matters that the review committee on Grameen Bank is, examining this transfer of funds. By Grameen Bank's own admission they transferred funds given to Grameen Bank to Grameen Kalyan. If this is a violation of the existing laws which common sense tells us must be, then stern action should be taken against those responsible. That the matter has been resolved with the donors cannot be an excuse to exempt anyone who would violate the law of the land.
- Really? Which law of the land has been violated? Do tell.
And finally, nobody is above the law
Mahfuz Anam and James Moriarty surely know and embrace this principle. They are the champions of democracy and rule of law. They must know that even the US president can be impeached and brought to face trial for his actions.
Yes, Yunus made us all proud by winning Nobel prize, but no one else made us more proud than the freedom fighters of 1971. Even in case of the freedom fighters, have we made them exception to the law of the land? Don't we bring them to justice in case they do anything illegal? Then why should winning a Nobel prize or working in a non-AC room sitting on a wooden chair make Yunus an exception?
If we look back at the recent history of USA, we would see that everyone – from Robert F. Kennedy Jr. to Michael Jackson, from Muhammad Ali to presidential candidate John Kerry, or even California governor Arnold Schwarzenegger – was brought to face trial for various "illegal" acts/and or "technical or "procedural" irregularities.
A couple of days ago, Senator Kerry expressed his support for Dr. Yunus and called for an amicable solution for the present crisis. However, the Massachusetts Senator and former presidential candidate found a tax lien filed against his 2004 campaign for unpaid unemployment taxes to the tune of $819,848.
The Kerry camp maintained that the problem may have lied in the improper filing or missing files of employment tax returns. Kerry campaign spokeswoman Whitney Smith told reporters that the failure was on the part of the government, not the Senator.
"The IRS merely has a gap in their electronic records of the 2004 campaign's payroll forms. We filed these forms correctly, and we're working with the IRS to provide them any and all needed information to set the record straight."
That did not convince IRS to withdraw their case and the matter continued in the court.
The IRS position is: "We have made a demand for payment of this liability, but it remains unpaid." In addition, the IRS disputes the claim that the Kerry campaign filed the proper forms at all."
Similarly, when irregularities regarding Grameen Bank surfaced, Government of Bangladesh formed a "review committee" (not an "investigation committee", so that the honour of Dr. Yunus can be maintained). Later, Bangladesh Bank took action according to the law. This is entirely a matter well within the sovereign right of the state of Bangladesh to implement its law as it may be applicable to its citizens and institutions, just as it was the right of IRS to implement US laws against alleged violation of tax laws by Senator Kerry.
In early December, we learned that a tax lien for nearly $80,000 was filed against California governor, Arnold Schwarzenegger. That was news to the actor-turned governor and his office, whose representatives say that was the first they'd heard of it. The IRS lien – which was filed with the Los Angeles County Recorder's office – says Schwarzenegger owes $29,047 for tax year 2004 and another $40,016 for 2005.
The governor's spokesman, Aaron McLear, was very clear with reporters, explaining that it was not a matter of Schwarzenegger failing to pay his taxes … it was a "paperwork tracking discrepancy." McLear added this issue was "completely unrelated to the payment of taxes, which the governor has paid in full and on time."
A code listed on the tax lien signifies the problems arose from information returns, possibly related to payroll taxes, and appears to indicate a reporting error. A California tax attorney contacted by the San Jose Mercury News said that Schwarzenegger may be listed as one of a group of owners of a business that faced some tax issues in the past. In that case, said the attorney, each partner would be listed as a responsible person, which would explain why Schwarzenegger would be unaware of the lien.
And surely, Hillary Clinton, above all people has not forgotten about Bill Clinton's impeachment. Bill Clinton, the then president of the United States, was impeached by the House of Representatives on charges of perjury and obstruction of justice on December 19, 1998, but acquitted by the Senate on February 12, 1999. Two other impeachment articles, a second perjury charge and a charge of abuse of power, failed in the House.
The charges arose from an investigation by Independent Counsel Kenneth Starr. In the course of the investigation, Linda Tripp provided Starr with taped phone conversations in which Monica Lewinsky, a former White House Intern, discussed having oral sex with Clinton. At the fellatio deposition, the judge ordered a precise legal definition of the term "sexual relations" [2] that Clinton claims to have construed to mean only vaginal intercourse. Starr obtained further evidence of Clinton's philandering by seizing the computer hard drive and email records of Monica Lewinsky. Based on his conflicting testimony, Starr concluded that Clinton had committed perjury. Starr submitted his findings to Congress in a lengthy document (the so-called Starr Report), which dealt with the relationship between Clinton and Lewinsky, replete with lurid details of their encounters. The report and subsequent proceedings provided ample fodder for both political opponents and late-night comedians.
Critics of Starr also contend that his investigation was highly politicised because it regularly leaked titbits of information to the press, in violation of legal ethics, and because his report included lengthy pornographic descriptions which were humiliating yet irrelevant to the legal case.
The whole investigation was done in a transparent way and millions of people all over the world came to know the details of Clinton's sexual relationship with the intern were exposed. It can be argued that, the procedure was not "respectful" for a president, but US law allowed Starr to do so.
If that much humiliation can be directed at a US President, while Bangladesh or any other foreign country remain "untroubled" by it, as it was entirely a matter well within US jurisdiction, we can't understand why Moriarty is so "deeply troubled" by Dr. Yunus case.
As far as Hilary is concerned, it was she who had to bear all the pain and embarrassments resulted from the improper action of her husband and the unkind and ruthless investigation process and media trial that followed. Hilary was the innocent victim of the Monica affair. Still, she never questioned the US system or the right of the Independent Counsel Kenneth Starr in conducting his investigation as he found fit. So this came to us as a shock when we see Hilary is taking a position on the YUNUSGATE where she questions the sovereign right of Bangladesh State to investigate any alleged irregularities and taking actions the state considered necessary.
Oscar winning film maker Roman Polanski is still a fugitive for his alleged sexual offence to a 13-year-old girl back in 1960s. Oscar win did not place Polanski above the law. It's the beauty of US legal system, it's this idea of American justice that inspires us all over the rest of the world.
So it's a big surprise to us when, Moriarty, above all people tries to trivialise Yunus' alleged crime by saying its a mere "procedural" matter and claims that USA is "deeply troubled" by Bangladesh governments action.
- I really don't quite see the relevance of this lengthy diatribe. We all agree that no one is above the law. But surely it is relevant what law Yunus is said to have violated. It is not as though he is being removed for misconduct or embezzlement or some crime. He is indeed being removed on a minor legal technicality. Surely even NIK can see the difference and understand why the latter is so much more noxious?
So what are the facts?
Grameen Bank is a statutory public authority created by the Grameen Bank Ordinance, 1983 [Ordinance No. XLVI of 1983] promulgated by military dictator General Ershad.
Under Article 152 of the Bangladesh Constitution the term "Statutory public authority" means any authority, corporation or body the activities or the principal activities of which are authorized by any Act, Ordinance, Order or instrument having the force of law in Bangladesh."
Grameen Bank is not an independent entity which operates outside the purview of Governmental process as a State Organ.
Grameen Bank's legal status is distinct from an association of persons such as a company, trust or cooperative which associations may be formed under a law but not by the law itself and which associations of persons are not statutory public authorities and therefore not State organs/instruments of State.
Contrary to the popular view, as a State organ/instrument, Grameen Bank has not been founded by any individual person, or group of persons. Its existence, continued operations and dissolution [winding up] are dependent on the State acting through the Government although Parliament may invoke its legislative authority to repeal the statute [Ordinance] under which it was created.
- This is true so far as it goes. But the government also has the right to wind up private companies and NGOs, so I don't quite follow NIK's point.
However, if the terms of the regulation is changed in new regulation then in case of appointing the MD, re-approval of Bangladesh Bank must be taken.
- Must it? Why? Who says so?
As the terms of the regulation of the appointment of MD of Grameen Bank are changed in Grameen Bank's service rules of 2001 where no age limit for Yunus is incorporated, it was a requirement on the board's part to take re-approval from Bangladesh Bank to make Yunus's reappointment as the MD of Grameen Bank to be legally valid which was never taken.
- Yunus was not reappointed in 2001. He was appointed in 1983 and reappointed in 1990, with prior BB approval.
And how can a person be beyond the rules/regulation of an institution is beyond our comprehension. We are afraid it's this very tendency of placing Yunus above the law that has led to this present crisis.
The fact is, as Yunus has passed 60 year age limit to continue his service as a Grameen Bank employee, it was within the rightful authority of Bangladesh Bank to take actions against him.
- Actually, no. If BB has a problem, they can take it up with the GB board. BB has no power to remove Yunus, only the board does, according to Section 8 of the GB Ordinance:
8. (1) The general direction and superintendence of the affairs and business of the Bank shall be entrusted to a Board of Directors to be constituted in accordance with the provisions of this Ordinance and such Board may exercise all such powers and do all such acts and things as may be exercised or done by the Bank.
No board of directors can appoint anyone as MD or formulate regulations/service rules that are unlawful according to the law of the land.
- Perhaps, but that does not give BB the right to remove a director so appointed. It can reject the board's recommendation and direct the board to choose someone else. If the board refuses to comply, then BB can take it to court and get a court order instructing the board to comply.
While Mafuz Anam was busy hailing Yunus as the messiah of microcredit, others have pointed out the irregularities that Dr. Yunus has already committed regarding Grameen Bank's operation and dubbed him as the Godfather of microcredit. (Mark Engler, on 19th feb, 2010 in an article published in "The independent") One of them, Salah Uddin Shoaib Chowdhury identifies the following:
- Strangely, this list is identical to the one appended to the "email head around the world." How odd!
Grameen Bank is authorised to lend only to the landless poor:
Grameen Bank is authorised to provide credit and other services to landless persons in the rural areas. It is not authorised to lend money to any person [or entity] other than the landless persons including Grameen Krishi Foundation, Grameen Motsho Foundation and Bigyan Gonoshikha Kendro as indeed it is not to Packages Corporation which it has done.
- Not true. Section 8(3) of the GB ordinance allows this.
Packages Corporation Limited:
Grameen Bank has undertaken a Managing Agency on behalf of Packages Corporation Limited ["Packages"], a family enterprise owned by Dr. Yunus' father, Mr. Dula Meah and his family in which Professor Yunus and his brothers, Abdus Salam and Mohammad Ibrahim are directors. Included under the terms of the Agreement, Grameen Bank and Packages Corporation would share losses on 50- 50 basis, Grameen Bank would have access to the loans taken by Packages Corporation and Grameen Bank would lend money to Packages Corporation.
- So? This is also acceptable under Section 8.
Brothers appointed in entities created:
In one of these entities, brother of Dr. Yunus, one Dr. Mohammad Ibrahim has been made Executive Director, whilst Professor Yunus assumes the position of Chairman. Another brother of the Nobel laureate, Mohammed Jahangir is generally looking after the public relations of Grameen Bank and other enterprises of Grameen Bank Group.
- And? This is a crime under what law?
Furnishing Guarantees not authorised by law:
In the Bangladesh Bank Audit Report, mention is made of guarantees having been granted by Grameen Bank favouring several of the entities created by Grameen Bank. These guarantees are not authorised by law or under GB's own Memorandum and Articles of Association.
- I have not seen the alleged audit report so I cannot respond.
Formation of companies without authorisation in law:
Grameen Bank is a statutory body created by an Ordinance authorised to purchase shares of anybody corporate the object of which is to provide services to landless persons in the rural areas. Grameen Bank is not authorised to sponsor, subscribe, and incorporate new companies such as it has done.
- It is not enough to allege this. Please note that saying something does not make it so. If you cannot provide evidence of such allegations (and none is provided), then you should not make them.
Unlawful transfer of funds to other entities formed by Grameen Bank itself:
In all cases where Grameen Bank has formed new entities, companies, for profit or not-for-profit, financial institutions without obtaining a licence from Bangladesh Bank, trusts and hybrid entities, it has transferred funds or provided guarantees against loans taken by these new entities which it is not authorised to do.
- Again, an allegation with no evidence.
Professor Yunus' continuance as Managing Director beyond 60 years in violation of the relevant laws:
His continuance in office as Managing Director in violation of Clause 50 (1) of the Grameen Bank Service Regulations wherein it is provided that the age limit for employees of Grameen Bank shall be 60 years. This provision read together with Bangladesh Bank's rules regarding the appointment and reappointment of heads of Banks and non-banking financial institutions only re-affirm his unlawful continuance in office for more than 10 years.
- Dealt with already, but please also note that not all BB rules regarding banks apply to Grameen, as specifically stated in GB Ordinance.
Employment and Service Rules: whether made without authorisation:
A serious question which has been raised is that the present Service Regulations of Grameen Bank has been made without authorisation in law. Indeed, these have been gazetted, but the Rules are deficient inasmuch, contrary to law, since, as delegated legislation, they are shown [i] as have been gazetted in the name of Professor Yunus who is Managing Director of Grameen Bank; [ii]. There is no reference to the parent law from which such Rule – Making authority is derived nor any reference to the lawful person/legal entity upon whose instructions Professor Yunus has gazetted the Rules of Service;[iii] Professor Yunus is not authorised to make Service Regulations for Grameen Bank. To ascertain whether any offence under this head has been committed or not it may be prudent to check the law relating to the notification in the gazette by statutory bodies.
- If anyone can make heads or tails out of this, please let me know!
Grameen–Gonoshasthya Textiles Mills Limited:
Here, at the time of the formation of the company shares were allotted in the personal name of Professor Yunus, as indeed, all of the other subscribers of the company so formed, is self aggrandisement.
- Allegation without evidence.
Non-payment of savings of borrowers:
This case is as unfortunate as it can get. Borrowers' savings were put away into a fund to which they had no access. Borrowers departed without their savings between 1988 and 1992.
- Allegation without evidence.
Retrenchment – unfairly and on the basis of non existent Rules – coercion:
The retrenchment of thousands [about 4000] of employees between 2000 and 2003, shown as voluntary retirement, was not in accordance with any valid rules of service, and constitutes a blatant case against the rights of employees of a statutory body [whose fundamental rights also appear to have been violated].
- Allegation without evidence.
Activities: undertaking travel abroad for non-Grameen Bank purposes without authorisation from competent authorities:
It would be an issue to examine if the regulations relating to the undertaking of foreign travel by the Chief Executive of a statutory body requires the taking of permission from a competent authority and if permission was given for periods of time not consistent with pertinent rules / regulations by the competent authority for non–Grameen Bank purposes.
- Seriously?
We would add only three more things with this long list of irregularities by Dr. Yunus.
First, in a book, Grameen Bank At A Glance, written by Yunus and published in December, 2010, under the heading Grameen Network, its clearly stated, "Grameen Bank does not own any share of the following companies in Grameen Network. Nor has it given any loan or received any loan from any of these companies. They are all independent companies, registered under Companies Act of Bangladesh, with obligation to pay all the taxes, and duties, just like any other company in the country."
Then the name of 27 such companies are given in a list which starts with Grameen Phone Ltd.
Mahfuz Anam wrote, "Under the visionary leadership of Yunus, GB moved into innovative partnerships with global companies like Danone, Adidas, Viola, etc. to provide nutritious yogurt, cheap shoes and safe drinking water at affordable prices. Its stunningly successful partnership has been with Telenor of Norway, leading to the formation of GrameenPhone (GP), by far the most successful mobile company in the country, now the highest taxpaying company at Tk 900 crore annually."
But according to Dr. Yunus' own admission that none of these companies are owned by Grameen Bank. Now the 900 core taka question is, who owns the shares of say, Grameen Phone? Who are the individuals who are being handpicked by Yunus to own the shares of all these companies created by using Grameen brand name, goodwill, resources, networks and widely held misperception that Grameen Bank owns shares in those companies? To whom the profits go?
- This is symptomatic of NIK's argument. He insinuates that here is something wrong going on, but has no evidence, only dark suggestions and innuendo.
If Yunus was so much in to his crusade against poverty then why it never occurred to him that profits from those companies should be, in part, transferred to Grameen Bank, so that it can subsidize its interest rates and offer a lower and reduced rates to its poor borrowers?
- Maybe because if he had tried to, people like NIK would scream to the rooftops that GB has no right investing in a telecom company. And how can Grameen Telecom (a non-profit) otherwise transfer funds to GB? Had they done so, doubtless the NIKs of this world would see it as more "trickery."
It never occurred to him as he knew, right from the beginning, though a journalist of Mafuz Anam's stature never bothered to know, that in none of these companies Grameen Bank has any shares whatsoever. All these companies are created by Yunus by an innovative partnership with global companies like Danone, Adidas, Viola, etc and not Grameen Bank. These are companies that have nothing to do with Grameen Bank, and Yunus only used its goodwill and network.
- I like how "innovative" is used as a sneering insult here.
The poor rural women, members or theoretically owners of Grameen Bank, do not have a single share in Grameen Phone. Then who own the shares? How are the directors chosen? By whom?
- Instead of asking questions intended to cast dark suspicion in the minds of the gullible reader, why does not NIK, a journalist, find out the answer? Could it be because the answer is so mundane and leaving the question hanging darkly in the air, unanswered, is much more suggestive? Grameen Telecom is a non-profit and all funds generated by its ownership stake in GP by law have to be ploughed back into GT's core business of ICT connectivity for the poor.
How can a misperception of this magnitude be continued for so many years that these are all Grameen Bank owned companies?
- This is Yunus's fault … how exactly? NIK already acknowledged that Yunus has made it clear that this is not so.
We would also like to ask how much has been paid in dividends to the Grameen Bank members/ share holders so far by the bank?
- Again, what is this? An accusation dressed up as a question? Is NIK alleging wrong-doing or is he just trying to create confusion?
Grameen Bank sent us a rejoinder regarding the publication of a story in Amader Shomoy where we reported that Grameen Bank had rented out 11,000 square feet of Grameen Bank headquarters floor space to Yunus Centre for only one taka per month.
In the rejoinder, sent on a Grameen Bank letterhead, it was claimed that, on 2nd May 2007, the board of directors of the bank decided that in order to promote the philosophy and activities of Nobel winner Dr. Yunus, a nobel laureate secretariat would be formed and Grameen Bank would give a floor of Grameen Bank building consisting of 11,000 square feet to the Nobel laureate secretariat without any rent.
On 24th June 2008, the Grameen Bank board of directors in a meeting decided that the 16th floor of the Grameen Bank Building will be leased to Nobel laureate trust for 25 years. On 24th July, 2008, a Nobel laureate trust was formed by making the chairman of the board of directors of the bank as the chairman of the Nobel laureate trust.
(Interestingly, the trust was formed after the decision to lease them the 16th floor was taken).
- So?
According to the board decision, Grameen Bank and the Nobel laureate trust signed an agreement by which the trust was given the lease of the 16th floor for 25 years. And according to another decision of that same board meeting, the Nobel laureate trust signed an agreement with Yunus Centre on August 3 and leased the 16th floor to Yunus Centre for 24 years at a yearly rent of only 1,000 taka.
It's clear from the rejoinder, all those things were done only to give Yunus Centre the lease of the 16th floor at a yearly rent of 1000 taka in a way that would minimize the future potential chances of corruption/nepotism charges.
- What's the point of this story? What does it serve to demonstrate? Exactly what is the wrongdoing alleged here?
Another hilarious fact stated in the rejoinder is that, the Yunus Centre has 8 (eight) (yes, you are reading it correctly, no printing mistake) employees working for it ranging from CEO to peon.
- I don't get the joke.
It has been claimed that Grameen Bank covers 8.4 million people. However, a number of researchers have claimed that the figure would be much lower, close to 7 million. And if we take in to account the active borrowers, it would be even less. The myth of 98 percent recovery rate is also being challenged as grossly incorrect as much of it is glossed over by dodgy accounting procedures.
- Allegation without evidence.
Finally, much fanfare has been made regarding Social Business promoted by Yunus. We would just like to ask one thing, if the essence of social business is to doing business is non-profit then why on earth all the so called social business companies, created by Yunus in partnership with global companies, are registered under Companies Act of Bangladesh as for-profit companies and not under the same law as not-for-profit companies?
- Perhaps because a social business is not the same as a non-profit? Another of NIK's "if … then"!
The strategy of creating confusion and making contradictory claims is evident in Dr. Yunus's position regarding Social Business too. One such example is given below from the FAQ section on social business in the Yunus Centre website (http://www.yunuscentre.org/).
Should social business avoid making profit?
No, it does not. The first aim of social business is to achieve the social objective in a financially sustainable way. It should not give up social objective to make profit beyond sustainability. Making profit without sacrificing social objective is welcome. Social businesses do not give dividends to the investors, all the profit is reinvested in the company for expansion and improving the quality of the product or service.
If the above definition of social business is what Dr. Yunus believes, it is by no means something new or invented by Yunus.
- Where exactly has Yunus claimed he has invented social business?
In the Companies Act of Bangladesh, under section 28 there is a provision of establishing a not-for-profit company. Those non -profit companies share similar philosophy regarding business as Yunus model of social businesses do, i.e. directors/shareholders would not take any dividends from the companies and the profits should be reinvested or used to meet some social cause/objective.
Can someone who started a social business decide to take profit?
Yes, a social business can be transformed into PMB if the owner wants it. Since there is no law governing the creation and termination of a social business, no procedure has to be followed. When laws will be passed there will clear guidance as to the protocol of registration and termination of the status.
Here we can see how Yunus contradicts his own philosophy. On the one hand, he is saying that investors/share holders of social businesses would not take any dividends, at the same time he is saying that as there is no law forbidding them to do so, which is not true as there are laws to prevent not-for-profit company shareholders/investors from taking dividends.
- But a social business is not the same as a non-profit. NIK even admitted this (in an accusation) only a few paragraphs ago!
They can take dividends if they wish to. If that's the case then all the other principles of social business has no relevance or meaning whatsoever. This is a dominant trait that can be found in most of Yunus's activity. There is always a clause that makes all the clauses, good principles irrelevant and meaningless and gives a certain individual almost absolute power to be exercised according to his wishes. We need not mention who that particular individual in most cases turns out to be.
- Really? Yunus's book about social business is obviously about more than just the social businesses he is involved with. But this whole line of reasoning is farcial. One, it has nothing to do with anything, other than being yet another thing that NIK doesn't like about Yunus, and, once again, it is a mish-mash of innuendo, insinuation, half-truths, willful obtuseness, out-of-context quotes, putting words in Yunus's mouth and drawing unwarranted conclusions.
We would like to draw attention of our readers to another important thing. Our finance minister admitted that he is still a friend of Yunus and that the image of the country was damaged as the government removed Yunus from Grameen Bank. In this respect we would like to humbly ask the finance minister to resign from his position as, clearly, his judgment is clouded by the fact that he is a friend of Yunus. How can a finance minister say in public that removal of Yunus lawfully from a position he was illegally occupying (at least that's the government position in this matter) damages our country's image? It has rather enhanced our image as we have proved no one is above the law in this country.
- This is funny. NIK evidently believes that "image" is separate from what other people think. I'm afraid that is exactly what image is. Only a fool would say he has enhanced his image by taking action that earns him universal opprobrium.
If an exception is made in Yunus's case by reaching an "amicable" solution, then how can the government, the finance minister or Bangladesh Bank claim any moral authority over sanctioning punitive measures on other banks/ directors of other banks that would breach the law of the land?
- Does he not see the difference between a minor technical transgression (at worst, what BB is alleging) and corruption and fraud. Why is he treating all alleged crimes as if they are equal in gravity? Does he really believe that if the govt and Yunus came to an amicable agreement on this issue that it would undermine BB authority over other banks? Really?
We would like to appreciate the bold position taken by our foreign minister in this regard.
We would like to request Mr. Muhith to reconsider his position immediately, as there is clearly a conflict of interest here. We quote Mr. Muhith: "There is no greatness in holding on to a post".
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