Dr MuhammadYunus was awarded the Nobel Peace Prize in 2006 for pioneering the modern concept of microcredit and microfinance. He is the founder of Grameen Bank. This article will shed light on little known facts the creation of Grameen Bank and related issues as it proverbs “it is always darkest under the lamp” for the readers to have a balanced view of Dr Yunus.
To ensure the success of Grameen Bank’s microcredit operations, the Bangladesh government did not interfere with the activities of Dr Muhammad Yunus, who served as the Managing Director of the bank from its inception. Taking advantage of this opportunity, he operated the bank according to his own will, disregarding the laws and regulations governing bank operations. According to section 14(4) of the Grameen Bank Ordinance, 1983, the Managing Director is a full-time officer of the bank. However, Dr Muhammad Yunus remained outside the country for the majority of the time without the permission of the authorities. Due to Dr Yunus’s influence in the establishment and management of Grameen Bank, the bank’s Board of Directors or the Chairman of the Board did not raise any questions about his arbitrariness and irregularities; one of which is the attempt to hold the position of Managing Director indefinitely disregarding the Grameen Bank Ordinance, 1983.
According to section 14(1) of the Grameen Bank Ordinance, 1983, the bank’s Board of Directors shall appoint the Managing Director with the approval of Bangladesh Bank, and according to section 14(4), the Managing Director of the bank can remain in service for a maximum period of 60 years. However, in 1999, the Board of Directors, without the prior approval of Bangladesh Bank and in violation of section 14(4) of the Grameen Bank Ordinance, 1983, appointed Dr Yunus, who was 60 years old, as the Managing Director of Grameen Bank for an indefinite period. Bangladesh Bank authorities noted this illegal appointment of Dr Yunus during the Grameen Bank inspection in 1999. As Dr Yunus’s appointment as Managing Director was made without obtaining the prior approval of Bangladesh Bank, thereby violating section 14(1) of the Grameen Bank Ordinance, 1983, Bangladesh Bank relieved him from his duties as the Managing Director of Grameen Bank. Dr Yunus filed a writ in court challenging the legality of Bangladesh Bank’s decision, but following the court’s verdict in April 2011, he was compelled to resign.
The Bangladesh Supreme Court ruled that Dr Yunus’s continued occupancy of the Managing Director position after his 60th birthday was illegal. Consequently, for 10 years (from June 2000 to April 2011), while illegally holding the position of Managing Director, he received 5,293,704 Taka, including salary, allowances, and other benefits. After various deductions, the net amount received was 3,881,801 Taka (including 200,163 Taka as income tax). The bank also bore all expenses for a car used full-time by him. As Managing Director, he used one telephone at the office, two telephones at home, one internet connection, and one PABX phone. Additionally, four newspapers were kept for him at the office.
Another irregularity is receiving the honorarium, Awards, and Royalties Received from Foreign Institutions by breaching the bank’s regulation. Dr Yunus, from July 2004 to June 2011, during a period of 7 financial years, declared a total of 4,988,122,052 Taka as tax-free income, comprising honorariums from 133 foreign institutions, awards from 10 institutions, and royalties from 13 institutions, and availed income tax exemption benefits amounting to a total of 1,247,030,011 Taka. As Managing Director, Dr. Yunus did not obtain approval from the bank’s Board of Directors before receiving these honorariums, awards, or royalties from abroad. According to the Grameen Bank Ordinance, 1983, and the judgment of the Appellate Division of the Bangladesh Supreme Court dated May 5, 2011, the Managing Director of Grameen Bank is a “public servant.” Therefore, while serving as the Managing Director of Grameen Bank, it was necessary for him to obtain prior approval from the Board of Directors/Bangladesh Government before receiving any honorarium, award, or royalty from any domestic or foreign organization. Dr Muhammad Yunus did not do so. Consequently, the entire matter of his foreign travels and the receipt of honorariums, awards, and royalties from abroad is questionable due to his failure to obtain prior approval from the Board of Directors / Bangladesh Government.
More severe breach is the establishment of Yunus Centre, Dr Yunus’s personal institution, on the 16th floor of the Grameen Bank building, by allocating 11,000 Square Feet of Space in Grameen Bank Building at a Monthly Rent of 1,000 Taka. According to the report of a 5-member high-powered review committee, formed by the Bank and Financial Management Division of the Ministry of Finance to evaluate the overall activities of Grameen Bank, chaired by Professor A.K.M. Monowar Uddin Ahmed of the Economics Department of Dhaka University on 10 January 2011, the Nobel Laureate Trust, established by Grameen Bank, allocated 11,000 square feet of space at a monthly rent agreement of only 1,000 Taka and then, through another agreement, allocated it to Yunus Centre at the same rent. In this case, Dr Yunus financially harmed the bank by using 11,000 square feet of the bank’s space at a monthly rent of only 1,000 Taka.
Dr Yunus did Illegal lending, loan waiver, and work orders to his family business, Amounting to 95 million Taka. While serving as the Managing Director of Grameen Bank, he illegally provided loans, waived loans, and issued work orders worth 95 million Taka to his own family’s ailing and loss-making business, Packages Corporation. According to section 19 of the Grameen Bank Ordinance, 1983, Grameen Bank’s loan facilities are limited to landless poor borrowers. However, he violated this law by providing a large amount of loan to his institution, Packages Corporation. Later, when the institution failed to repay the loan, Dr Yunus abused his power and cleverly waived interest and even a portion of the principal. At the 76th meeting of Grameen Bank’s Board of Directors held on 22 March 2006, the bank’s interests were not considered when deciding to re-fix the interest rate on the capital and current loans given to Packages Corporation from 1990 to 2005 at 5% instead of the existing rates of 10%, 12%, and 16% to settle the accounts.
Furthermore, Dr Yunus created two new organizations, Grameen Fund and Grameen Kalyan, to divert funds from Grameen Bank. Subsequently, about 50 more affiliated organizations were formed from these two entities. Essentially, to establish his control over Grameen Bank’s funds, Dr Yunus cleverly moved Grameen Bank’s funds to these affiliated organizations. According to section 19 of the Grameen Bank Ordinance, 1983, Grameen Bank can only provide loans to the landless. To fulfil his ambition, Dr. Yunus clearly violated section 19 of the Grameen Bank Ordinance, 1983, by transferring Grameen Bank’s funds to affiliated organizations. In 1984, a project called Studies, Innovation, Development and Experimentation (SIDE) was initiated with funding from donor agencies for the socio-economic development of Grameen Bank’s members. Later, the project was renamed Social Venture Capital Fund (SVCF). By 1993, the total amount of funds provided to the project by NORAD, SIDA, CIDA, USAID, and the Ford Foundation amounted to 491 million Taka. At the 31st meeting of Grameen Bank’s Board of Directors, ‘Grameen Fund’ was formed for the separate management of Grameen Social Venture Capital Fund (SVCF). The primary source of funds for Grameen Fund was the grants received by Grameen Bank from donor agencies for the SVCF project. Grameen Fund and Grameen Kalyan were established by separating Grameen Bank’s own funds. Subsequently, more organizations were formed with the financing of these two entities. Notably, according to the Grameen Bank Ordinance, 1983, the formation and financing of these organizations by Grameen Bank were beyond the scope of its powers. Additionally, the transfer of grant money, obtained using Grameen Bank’s goodwill, to Grameen Fund harmed the interests of Grameen Bank and its members.
A review of Grameen Bank’s income tax records shows that on December 31, 1996, a total of 3,914,362,098 Taka was transferred to Grameen Kalyan: 3,471,849,473 Taka from the bank’s ‘Revolving Fund’ and 442,512,625 Taka from the ‘Social Advancement Fund’. Even more alarming is the fact that on the same date, December 31, 1996, Grameen Kalyan re-lent 3,875,162,096 Taka to Grameen Bank under the ‘Borrowings from Banks and Foreign Institutions’ category. Although it was claimed that 3,914,362,098 Taka was transferred from Grameen Bank to Grameen Kalyan on December 31, 1996, since the funds were not actually transferred, the existing assets of Grameen Bank had to be shown on paper as a loan received from ‘Grameen Kalyan’ on the same day to account for their source. Through this, Grameen Bank attempted to evade income tax on funds that would have been considered ‘unexplained income’ if there were no corresponding assets. This violated the conditions of the income tax exemption SRO No. 93-Law/2000. The agreement regarding the transfer of funds between Grameen Bank and Grameen Kalyan was executed in May 1997. However, the fund transfer was shown in December 1996, almost five months before the agreement was signed. This manipulation was also done under the instructions of Dr Yunus. The Bangladesh government exempted Grameen Bank from paying income tax, but not Grameen Kalyan. By creating Grameen Kalyan as an affiliated organization of Grameen Bank, Dr Yunus fraudulently deprived the government of income tax revenue. After January 1, 1997, 3,941,3065 Taka was transferred from Grameen Bank’s ‘Social Advancement Fund’ to Grameen Kalyan’s fund. As this fund transfer was not proper, the Norwegian donor agency NORAD (Norwegian Agency for Development Cooperation) sent a letter to Grameen Bank on May 26, 1998, requesting the return of the provided funds to Grameen Bank. Several European countries, including Norway, Sweden, the Netherlands, and Germany, provided significant amounts of grants to Grameen Bank’s poverty alleviation program as subsidies. According to information from New York University Professor Jonathan Morduch, Grameen Bank received 175 million USD in subsidies at that time. Following Dr. Yunus’s transfer of over 100 million USD from this substantial grant to Grameen Kalyan, Norwegian state television NRK broadcast a documentary titled ‘Caught in Micro Debt’s Trap’ on November 30, 2010. The documentary filmmaker Tom Heinemann told bdnews24.com in Bangladesh that he had tried to speak with Dr. Yunus about this for six months, but Dr Yunus had refused. When bdnews24.com attempted to contact Dr. Yunus on December 1, 2010, an assistant of Dr Yunus, stating that he was abroad, provided an email address to contact him. Dr Yunus was cautious that this incident of ’embezzling’ hundreds of millions of dollars should not be revealed. In a letter dated April 1, 1998, to the then Chief Executive Officer of NORAD, Dr Yunus mentioned, “I need your help… If the government and people outside the government come to know about this, we will really have a problem.” Dr. Yunus formed Grameen Kalyan and Grameen Fund against the interests of Grameen Bank and transferred Grameen Bank’s money there. From these organizations, about 50 more affiliated organizations were later created, through which Yunus personally benefited. The National Board of Revenue (NBR) examined the income tax records of 13 affiliated organizations of Grameen Bank and found evidence of irregularities and false accounting statements. The affiliated organizations of Grameen Bank, namely (1) Grameen Fisheries and Livestock Foundation, (2) Grameen Danone Foods Ltd., (3) Grameen Capital Management Ltd., (4) Grameen Communications, (5) Grameen Shakti, (6) Grameen Telecom Trust, (7) Grameen Trust, and (8) Grameen Kalyan, illegally availed various income tax benefits. One of the major irregularities is tax evasion, where the affiliated organizations concealed accurate information in their income tax returns, which is a punishable offense under section 165 of the Income Tax Ordinance, 1984.
Dr Yunus manipulated in the Ownership of Grameen Telecom for personal gain and establish his absolute control. At the 41st Board meeting of Grameen Bank, a decision was made to establish ‘Grameen Telecom’ company and to provide a long-term loan of 300 million Taka at a simple interest rate of 11% from Grameen Bank’s own ‘SAF’ fund to Grameen Telecom. Additionally, it was decided that besides paying 11% interest for the loan provided from the ‘SAF’ fund, Grameen Telecom would provide at least 50% of its dividends to the ‘SAF’ fund. At the 46th Board meeting, a decision was made for Grameen Bank to act as a guarantor for a loan of 300 million Taka to be provided to Grameen Telecom by other banks and financial institutions. At the 50th Board meeting, a decision was made for Grameen Bank to provide a Keep Well Commitment for a loan of 10.60 million USD to be taken by Grameen Telecom from the Source Economic Development Fund (SEDF) and for Grameen Bank to provide a SIDE Letter for a loan of 50 million USD to be taken by Grameen Phone from IFC, CDC, and ADB. Grameen Telecom owns 34.2 percent shares of Grameen Phone, the value of which is approximately 132.35 billion Taka. From 2003 to 2022, Grameen Telecom received approximately 108.9019 billion Taka (approximately) as dividends from Grameen Phone. Currently, besides the shares of Grameen Phone, the total assets of Grameen Telecom amount to approximately 62 billion Taka. Out of this amount, 27.21 billion Taka is held as FDR, and 30.13 billion Taka has been provided as loans and grants to Grameen Telecom Trust. The remaining funds are invested as equity shares, loans, and grants in various Grameen-related institutions and in the capital market. Dr Yunus should have ensured Grameen Bank’s participation in the equity of Grameen Telecom by limiting it by shares to properly manage and utilize the vast assets held by Grameen Telecom. This would have given Grameen Bank ownership of Grameen Telecom, and the members of Grameen Bank could have directly benefited from Grameen Telecom. Although Grameen Telecom was formed with the financial assistance of Grameen Bank, Grameen Bank did not have direct ownership in it. Dr Yunus did not allow this to happen in order to maintain control over Grameen Telecom and personally benefit from the received dividends. On May 30, 2023, the Deputy Director of the Anti-Corruption Commission, Gulshan Anwar Pradhan, filed a case against Dr Muhammad Yunus and 13 others on charges of embezzling 252.20678 million Taka from the Grameen Telecom workers’ welfare fund. On February 1, 2024, a charge sheet was submitted to the learned court against Dr Yunus and 14 others. On April 2, 2024, the Dhaka Metropolitan Senior Special Judge As-Samchs Jaglul Hossain accepted the charge sheet against Dr Muhammad Yunus and 14 others. According to the First Information Report (FIR) of the case filed by the Deputy Director of the Anti-Corruption Commission, Gulshan Anwar Pradhan, a bank account was opened at the Gulshan branch of Dhaka Bank as per the decision of the 108th Board meeting held on May 9, 2022, in the presence of the Chairman of Grameen Telecom, Dr Muhammad Yunus, Managing Director Nazmul Islam, and other board members. A settlement agreement was signed between the Grameen Telecom Sramik Karmachari Union (Grameen Telecom Workers and Employees Union) and Grameen Telecom on April 27 of that year for the distribution of due dividends to the employees of Grameen Telecom.
May 9, 2022 the account was opened a day earlier on May 8. The settlement agreement also shows the bank account opening date as May 8, 2022 which is practically impossible. According to the terms of this fake settlement agreement and the decision of the 108th Board meeting, 437.0112621 million Taka was transferred from Grameen Telecom’s United Commercial Bank Mirpur branch to the Dhaka Bank Gulshan branch on May 10, 2022. Subsequently, as per the decision of the 109th Board meeting of Grameen Telecom held on June 22, an additional amount of 16.391389 million Taka was approved for payment as advocate fees. On the other hand, a total of 262.20678 million Taka was transferred in three instalments from the Dhaka Bank Gulshan branch account to the Dutch-Bangla Bank Local Office account in the name of the Grameen Telecom Sramik Karmachari Union. However, before the distribution of dividends to the employees, their due money was transferred without their knowledge and with malicious intent to the Dutch-Bangla Bank Mirpur branch account of CBA leader Md. Kamruzzaman (30 million Taka), to the account of CBA leader Mainul Islam (30 million Taka), and to the Dutch-Bangla Bank Mirpur branch account of CBA leader Firoz Mahmud Hasan (30 million Taka) at various times in May and June 2022. Similarly, 40 million Taka was transferred to the Commercial Bank of Ceylon Dhanmondi branch account of Advocate Md. Yusuf Ali, 50 million Taka to The City Bank Gulshan branch account, and 60 million Taka to the joint account of Advocate Zafrul Hasan Sharif and Advocate Md. Yusuf Ali at the Standard Chartered Bank Gulshan North branch, which they were not entitled to. According to ACC records, only 10 million Taka was actually transferred as advocate fees. The remaining 252.20678 million Taka was embezzled from Grameen Telecom with the assistance of the Chairman, Managing Director, and board members of Grameen Telecom, along with the CBA leaders and advocates concerned, by violating the terms of the settlement agreement and resorting to forgery with malicious intent. This is a punishable offense under the relevant sections of the Penal Code and the Money Laundering Prevention Act. The Deputy Director of the Department of Inspection for Factories and Establishments under the Ministry of Labour and Employment sent a report containing several allegations against the Board of Directors of Grameen Telecom Company to the ACC. Based on that report, an inquiry was initiated on July 28, 2022. The allegations included: embezzlement of 5 percent of the reserved dividends for distribution among workers and employees through irregularities; illegal deduction of 6 percent as advocate fees and other fees while paying the dues of workers and employees; and embezzlement of 455.213643 million Taka, including allocated interest, from the workers’ and employees’ welfare fund without distributing it. Additionally, there were allegations of embezzling 2977 million Taka from the company through money laundering by transferring it to the bank accounts of various affiliated organizations.
In response to above deceptions, Dr Yunus consistently claims that the Awami League government and former Prime Minister Sheikh Hasina have behaved vindictively towards him. The allegation of vindictive behaviour towards Dr Yunus is contrary to reality which can be proved from the information below.
The Chittagong Development Authority (CDA) leased 83.15 Katha (59870.39 square feet) of land in the name of Dr Yunus’s ‘Grameen Kalyan Foundation’ for a nominal price of 7,483,500 Taka for the establishment of ‘Ananya School and College’. An agreement was signed on December 15, 2015, between the Chittagong Development Authority (CDA) and Md. Imamus Sultan, Managing Director of Grameen Kalyan, representing Dr Yunus, Chairman of Grameen Kalyan. According to Clause 3 of the agreement, the Lessee shall complete the construction of a School & College building of international standard on the demised property within the stipulated time and period as mentioned in the shall be treated as a part and parcel of this indenture of lease and will be an integral part of this lease. According to Clause 5, if the lessee fails to complete the building or such house and appurtenances within the period referred in Clause 4, the lease shall be liable to be cancelled/ terminated/ determined by the LESSOR and on such cancellation/ termination the lessee shall surrender the demised property to the LESSOR. Dr Yunus or Grameen Kalyan did not fulfil any of the terms of the agreement. According to Clause 3 of the agreement, Dr Yunus did not establish the school and college. However, the lease of the land was not cancelled, nor was the leased land surrendered by him. If the Awami League government had behaved vindictively towards Dr Yunus, it would have cancelled the lease of the land.
Besides this, Dr Yunus was involved in a conspiracy to suspend the World Bank’s promised funding for the Padma Bridge project. Several of Dr Yunus’s emails were found among the 30,000 emails of Hillary Clinton leaked by WikiLeaks in 2016, in which he gave a detailed account of the Bangladesh government’s investigation against Grameen Bank and his removal from his position. In those emails, Dr Yunus sought Hillary Clinton’s help. He requested Hillary Clinton’s intervention to cancel the World Bank’s funding for the Padma Bridge project if the Bangladesh government did not stop the investigation against him. Reports published by WikiLeaks and in AP, Fox News, The Daily Caller, and the Denver Post indicate that evidence has been found of Dr Yunus’s involvement in stopping the World Bank’s proposed funding for the Padma Bridge project. During the investigation into specific allegations of his unethical misappropriation of large sums of money from Grameen Bank and its affiliated organizations, his corruption was exposed. As his unethical financial benefits were about to be stopped, he became desperate to embarrass the previous government and former Prime Minister Sheikh Hasina. He used his acquaintance with Hillary Clinton and other influential people to suspend the World Bank’s funding for the Padma Bridge project. In response to Dr Yunus’s anti-Bangladesh conspiracy, the World Bank withdrew its promised funding for the Padma Bridge project in 2012. However, the previous government built the Padma Bridge with its own funds. How can Dr Yunus accuse the previous government and Prime Minister Sheikh Hasina of malicious behaviour when he himself conspired against Bangladesh?
Interestingly, Dr Yunus is leading an interim government of Bangladesh for the last 8 months; during which he has already reversed all court judgements, stopped all incomplete investigations against him and proved who has the real vendetta against whom. Once in power, Dr Yunus made sure anyone related with previous government, whether politician, supporters, civil servants, is demonised so that not only can the full force of all government agencies be used against his adversaries, but also, they can be tortured and killed by his students wing by way of mob justice. “The master’s will is law” – for evidence look nowhere else but Dr Yunus’s current administration in Bangladesh.
Eng Shafiq Islam ( Political Analyst)