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Yunus faces fresh probe, fears takeover

Dhaka, Aug 2 (bdnews24.com)—The government on Thursday ordered a fresh investigation into the activities and financial transactions of Muhammad Yunus in his later years as Managing Director of Grameen Bank, but the Nobel laureate sees the move as nothing but a takeover bid.

The bitter saga continued to play out as the Cabinet meeting led by Prime Minister Sheikh Hasina approved the proposal for amending the Grameen Bank Ordinance 1983 to reduce the power of the bank's board.
The government will declare an ordinance with changes in the rules for appointing Managing Director of microlending institution founded in 1983 through a martial law ordinance.

The new law would delegate the Chairman more authority to pick the Managing Director of the microlender, changing the specialised bank's structure. The bank's poor borrowers comprise 75 percent of its shareholders while the government holds the other 25 percent.

The government will also examine the legality of Yunus staying on in the office beyond the mandated age of 60, Cabinet Secretary Md Mosharraf Hossain Bhuiyan said after the meeting.

The central bank said in the past that he had violated retirement laws by failing to relinquish control at 60 but an official government enquiry cleared him of any wrongdoing.

One and a half years after he was forced out of office, Hasina last month said Yunus may have 'influenced' the World Bank's decision to pull out from the proposed Padma bridge project.

Secretary Bhuiyan said the Cabinet asked the Bank and Financial Institutions Division of the Ministry of Finance to look into whether his continuing in the office for such longer period was lawful or not, how much money he took in salaries and benefits during that time and whether it was legal.

Also, the National Board of Revenue was asked to submit a report on whether the Nobel Peace laureate brought in any money from abroad as a wage earner and if so, if he was allowed to do so and whether he got any tax waiver on the amount.

The NBR will make the report with the help of Bangladesh Bank, the Cabinet Secretary added.

Yunus, who has so far refused to be drawn on the reasons for protracted wrangle –which many see as a political dogfight – for fear of further fuelling the controversy, sounded shattered.

The 72-year old, who made an abortive foray into politics during the emergency rule and has been an outspoken government critic, made an appeal to the people to save the microlending institution.

"I have been expressing my apprehension beforehand. Now my fear is becoming real. I'm very sad we couldn't succeed to stop the process," he said in a statement.

The amendment makes changes to three issues covered in two clauses under Section 14 regarding the appointment of the Managing Director. It suggests that the board recommends to the Chairman three eligible candidates for the post of Managing Director, out of which he will recommend one.

The amendment also scraps the previous provision requiring the board to form a selection committee to appoint the Managing Director.

It also changes the eligibility of the candidates; previously, the candidates were required to have experience in 'Rural Economy' and 'Grameen Banking Business'. The amended law requires them to have experience in 'Micro-financing' to do away with limitations on this matter.

Yunus said he was "very much upset" seeing the poor are being deprived of exercising their right in the bank owned and run by the poor and requested the nation to come forward to save the "asset of the poor and the country".

In 2006, Yunus shared the Nobel Peace Prize with the Grameen Bank for their initiative to provide micro-credit for poverty alleviation. Four years later, both were flung into public glare after a Norwegian TV documentary revealed that country's aid agency Norad's annoyance in the late 1990s over Yunus' handling of aid money meant for the Bank.

Yunus was challenged by the then Norwegian Ambassador to Bangladesh for failing to inform the donors before transferring the millions of dollars to a sister entity. While the Norwegians later insisted that no criminal activity has taken place, their International Development Minister Erik Solheim said it was "totally unacceptable that aid is used for other purposes than intended".

Grameen Bank claimed there was no wrongdoing in the agreement between the bank and Grameen Kalyan, under which it received Tk 3,917 million from Grameen Bank.

However, large-scale criticism of Grameen Bank's actions and works reverberated in the local and international arena and a government-formed commission found anomalies in the running of the bank.

Chief executive since Grameen was founded originally with government support and ownership, Yunus was questioned by the central bank for continuing in his job far beyond the retirement age for any executive in any such institution in Bangladesh.

Yunus was nearly 71 when the Bangladesh Bank gave the notice in March 2011. He went to the court and lost a series of legal battles, finally in the Supreme Court, eventually losing his hold on the institution he is credited with building in 1970s.

Following his removal, the government refused to bow down to pressure from US and international donor organisations to reappoint Yunus. It also ruled out a proposal to form a committee, led by Yunus, to look for a new Managing Director.

Currently, the bank's Deputy Managing Director Mohammad Shahjahan is standing in for the MD.

The Bank and Financial Institutions Division formed a commission on May 16, 14 months after Yunus' removal, to determine the fate of the Grameen Bank.

The commission was assigned with the task of recommending steps to the government about ways to ensure good governance, transparency and accountability of the microcredit NGO and how to bring it within the reach of state regulatory agencies.

The commission was also tasked to identify the institutional strengths, weaknesses and constraints in the Grameen Bank's operations and review the purposes, legal status and operations of the institutions, companies and enterprises established by it. It was to also report on the microcredit NGO's ownership and composition of its Board of Directors specifying qualifications for such membership.

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We have always had idiots running our country. Now they're on steroids with their idiocy.