[ALOCHONA] 'Yunus lied to review committee'

EXCLUSIVE

'Yunus lied to review committee'
Mon, Apr 25th, 2011

The Grameen Bank inquiry committee has caught Muhammd Yunus lying on a number of issues, including his role in running many Grameen companies. The committee also concluded the 1996 fund transfer that caused all the trouble for the Nobel laureate was done without any lawful authority but admitted that the dispute had indeed been settled, although after a lot of wrangling, with the Norwegian government.

"A review of minutes of Board meetings shows that decisions on associate companies of Grameen Bank are taken after deliberations in the meetings. But Dr Muhammad Yunus told the review committee that these companies had nothing to do with Grameen Bank," the committee report said.

The five-strong panel was led by Dhaka University economics professor Dr A K Monaw-war Uddin Ahmad, who specialises in regulatory issues and teaches international trade. The committee, formed in January, submitted its report to the government on Monday. Dr Ahmad's team included central bank deputy governor Nazrul Huda, former deputy Comptroller and Auditor General Rokeya Deen, former bank management professor R M Devnath, and Supreme Court lawyer Mohsin Rashid.

A copy of the full 90-page report, in Bangla, is available with bdnews24.com:http://bdnews24.com/details.php?id=194108&cid=2

Not just Yunus, the committee found, "Grameen Bank executives are acting as directors of 30 companies". On September 30, 2003, a board meeting gave permission for Yunus to act as chairman of 20 companies, the report said. "Until 2003, the Managing Director of Grameen Bank without the permission of the Board had been acting as Chairman/Director of other companies of the Grameen family," it said.

"There is no Board approval (yet) for Grameen Bank executives to act as directors of other companies. "According to the Grameen Bank Ordinance 1983, setting up of associate companies such as Grameen Fund and Grameen Kalyan is beyond its jurisdiction and therefore the Board of the Bank cannot even authorise the Managing Director and other executives to work as Chairman/Director of these organisations."

The inquiry also found that Yunus, being an employee of the bank, and other fellow executives went beyond their authority when they gave personal guarantees to set up at least 12 limited companies. A Grameen Bank spokesperson, general manager Jannat-E-Q-Quanine. when contacted by bdnews24.com at 11pm, declined to comment.

No respect for law

Grameen Bank broke laws in everything it did, according to the inquiry. "It grew big riding on a country-wide expansion of micro-credit. But in all the activities—administrative decision-making, procurement, role of directors in the Board, creation of different companies and organisations, use of funds, inter-company transfer of funds etc—there has been a tendency to violate laws and rules in Grameen Bank."

"In fact, the organisation did not follow rules and laws, rather grew completely dependent on one individual," the report said.

Female directors

The committee found that the much-trumpeted board representation from among poor borrowers of the bank was all sound and fury, signifying nothing. "It is also apparent from the proceedings of Board meetings that the elected female directors of the Grameen Bank do not play any role (in the deliberations). "It has been seen that the three government-nominated directors and the managing director are involved in all activities. The government-nominated directors form the executive committee. It is obvious that the elected female directors only attend the meetings.

"There is no relation between the principles and objectives of Grameen Bank and other associate companies. And it is clear from their (meeting) deliberations," the report said. "The full-time managing director of Grameen Bank Dr Muhammad Yunus is a public servant. But in the Article and Memorandum of Associations of Grameen Cybernet Ltd and Grameen Babsha Bikash, he has described himself as businessman.

"In Grameen Trust, he is a professor; and in Grameen Uddog, he introduces himself as Managing Director of Grameen Bank. In Grameen Textiles Mills Ltd Memorandum and Article, his address is Medical College Road, Panchlaish, Chittagong (not the usual address of Grameen Bank Complex)."

Fund transfer 'ultra vires'

The committee said that Grameen Bank indeed stepped beyond its legal authority to divert billions of takas of aid money to another arm of the Grameen family in 1996. It said that a 'credit account' was created in Grameen Kalyan by transferring the fund in the organisation to make the fund interest bearing. "It seems that the dispute regarding use/transfer of Norad aid funds for Grameen Bank has been settled. But the fund transfer to different organisations by Grameen Bank was beyond its authority (ultra vires)," the report said.

"Grameen Bank, from its revolving fund received from (Norwegian aid agency) Norad and other donors, transferred Tk 3.47 billion (Tk 347.18 crore) to Grameen Kalyan. "The bank in its balance sheet made revolving fund account debit and 'borrowing from Grameen Kalyan' account credit meaning it decreased equity and increased liabilities," the inquiry found.

"By doing so, the ownership of the fund was transferred. It can be considered as aid as no liabilities were incurred from Grameen Kalyan. Revolving fund should be used by Grameen Bank repeatedly," the report said.

"Besides, fund transfer issue was not mentioned in the agreement between Norad and the Bangladesh government. It means the action (fund transfer) of Grameen Bank was ultra vires. As a result, the objection raised by Norad on 15 December, 1997 seems logical."

"Grameen Bank sent a letter to Norwegian embassy on 8 January, 1998 and clarified that if the fund was managed by other organisations then efficiency would be increased, accounts of revolving fund would be properly utilised and it would reduce the tax burden." But, the committee said, it was not within the legal authority of Grameen Bank to transfer fund without the permission of donors on the excuse of reducing tax burden.
http://bdnews24.com/details.php?id=194095&cid=2

Read Bangla stories in full:

http://bdnews24.com/bangla/details.php?cid=2&id=156607&hb=top
http://bdnews24.com/bangla/details.php?cid=2&id=156590&hb=1
http://bdnews24.com/bangla/details.php?cid=2&id=156573&hb=2
http://bdnews24.com/bangla/details.php?cid=2&id=156604&hb=3
http://bdnews24.com/bangla/details.php?cid=2&id=156601&hb=4


http://bdnews24.com/details.php?id=194108&cid=2

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