Caught in Micro Debt

 

Norway's state television has recently investigated corruption and financial irregularities against Prof. Yunus. Danish filmmaker Tom Heinemann made a documentary film called “Caught in Micro Debt” from their investigative report. The film has become critical of so-called microloans and alleged that “Yunus and the bank had misappropriated funds donated by Norway” (Britannica). During the making of the documentary film, Heinemanntriedsix months to take Yunus' statement but to no avail. On the contrary, Yunus wrote a letter to the channel authority not to broadcast the report. The positive image of Muhammad Yunus that had long been presented to people, has proved opposite to what the documentary has revealed. Dr. Yunus allegedly diverted more than 100 million dollars illegally from Grameen Bank to another organization of his own called Grameen Kalyan in 1996 from the money given by several European countries (Norway, Sweden, Netherlands and Germany) to Grameen Bank as a subsidy for poverty alleviation.

The Grameen Bank was established in 1983 by the Government of Bangladesh under the laws of the land. The owner is the government and the borrower is the general public. Dr. Yunus has built 28 institutions under his control. As the Grameen Bank went to take control of these institutions funded by the government, he claimed that his institutions were taken over by force.

According to Article 152 of the constitution of Bangladesh, the Grameen Bank, as a statutory body, is part of the state--not a state organization or private organization or NGO. It is clearly mentioned in the Grameen Bank Ordinance of 1983 that Bangladesh Government and Bangladesh Bank can interfere in the affairs of Grameen Bank if need be.

Dr. Yunus even after the expiry of his age limit as the Managing Director of Grameen Bank, remained in this position. If the government had wanted, it could have inflicted some big punishment on him like dismissal, termination, forced retirement, demotion to a lower post etc. as part of the legal action. But the board of directors of Grameen Bank only informed Professor Yunus that he was no longer the managing director of Grameen Bank.However, Professor Yunus challenged the decision in the High Court. He hasclaimed thatthe Grameen Bank is a private institution with 97 percent shares of rural poor women, and he is the founder of this bank. The full bench of the High Court unanimously has rejected his claim and informed him that he was just an entrepreneur, not the founder, of the Grameen Bank. The Grameen Bank was established by the Government on behalf of the State and Yunus was the Managing Director only during the initial stage of the establishment of the bank.

Though donor groups have been giving grants and loans to Grameen Bank since its inception, Yunus never wanted the money of the grant to go to the state and the people. Hence, he formed the Social Venture Capital Fund (SVCF) with the grant money from the donors. On October 7, 1992, a decision was taken to form a separate organization with that fund. A limited company named “Grameen Fund” was formed in 1994 where Tk 49.10 crore was transferred. So, it can be assumed that bringing money from abroad in the name of Grameen bank and transferring it to elsewhere was Yunus’ blueprint.Interestingly, Grameen Kalyan and Grameen Fund were formed with the money of Grameen Bank. All the institutions formed through these two institutions are legally affiliated institutions of Grameen Bank.

The Grameen Telecom is the largest mobile network in the country. It is not-for-profit company established under Section 28 of Company Act. So,it cannot invest its dividend anywhere, except for social development. However, according to the review committee report, Grameen Telecom has financed 12 companies, including Grameen Phone Limited, each of which has business and equity holding of Tk 461.77 crore.  One wonders how Grameen Telecom, that was established by illegally diverting money to another service sector, has invested its dividends to set up another financial institution.

The tax evasion case against Professor Yunus was also proved in the court. In the last fiscal year 2020-21 Dr. Yunus donated all the money from his personal account to 'Yunus Trust'. The NBR demanded 15 percent of the donation tax from him as per the law at that time. Dr. Yunus refused to pay this, and filed a case against NBR's decision. In three income tax reference cases on May 31, 2023, Dr. Yunus lost. Accepting the verdict, he deposited more than 12 crores to NBR through pay order.

After the terrible floods in 1998, almost all the NGOs in the country relaxed the payment of installments in their micro-credit programmes at the request of the government. The only exception was Professor Yunus’ Grameen Bank. Mirza Azam MP discussed this on a point of order in the Parliament. However, Yunus's Grameen Bank did not budge even an inch from the decision despite huge criticism.

From August 98 to January 99, Grameen Bank filed around 13 thousand certificate cases across the country to collect installments. At least two hundred poor farmers were arrested in these cases. Jessore farmer Rustom committed suicide underthe continued pressure of debt repayment with only five installments left. Helpless Rustam's daughter and wife were trapped under the open sky, Grameen Bank loans did not release them even after such a cruel incident.The reaction of Professor Yunus to the event was: “the law is equal for all” (Feb 22, 2024 Channel I Online).  So why can't he rely on law when it’s his turn?


Dr. Rashid Askari is a
Professor of English and
former Vice Chancellor of
Islamic University Bangladesh.