Yunus’ supporters have tried to create a smokescreen so that the recent exposures appear as malicious and politically motivated. It is about time they took a more detached approach and seriously address the much needed restructuring that Grameen warrants. Why are they concerned about protecting Yunus and not the 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.
Grameen Bank has undertaken a Managing Agency on behalf of Packages Corporation Limited (“Packages”), a family enterprise owned by his 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,
In one of these entities, his brother, one Dr. Mohammad Ibrahim has been made Executive Director, whilst Professor Yunus assumes the position of Chairman
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.
Grameen Bank is a statutory body created by an Ordinance authorised to purchase shares of any body corporate the object of which is to provide services to landless persons in the rural areas. Grameen Bank is not authorised to sponsor, subscribe, incorporate new companies such as it has done.
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.
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..
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.
The basic case against the interest rates charged by Grameen Bank is that these interest rates are usurious (“excessive” or “illegal”) interest rates under the various laws relating to the charging of interest rates by Money Lenders. The principal legislation among these being the Usurious loans Act, 1918, the Money Lenders Act, 1933 and the Money Lenders Act, 1940; further, the jurisprudence of higher courts in the Sub-continent on “ usury’ under the said law or similar laws and in other similar jurisdictions clearly show that the interest rates charged upon landless persons in the rural areas is not only usurious but constitutes a violation of their fundamental rights as contemplated under the equality clauses embodied in Articles, 27 and 31 of the Constitution. It cannot be a valid case to say that Grameen Bank’s rates are lower than the interest rates charged by other micro-credit agencies.
The method of recovery of loans practised by Grameen Bank is not authorised under the Grameen Bank Ordinance, 1983 (as amended to date, the last amendment having been made on 31 July, 1990) even upon rendering inapplicable certain provisions of the Public Demands Recovery Act, 1913. Further, the method of recovery practised by Grameen Bank is directly in conflict with the applicable law relating to recovery set out under the Money Lenders Act, 1940 under Section 41 (1) the effect of which violation has been defined as “molestation” of the borrower by the lender.
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.
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.
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).
The Ordinance / Statute does not provide for purported companies created by Grameen Bank to take loans from banks as these companies have done (take loans) for purposes which Grameen Bank itself cannot undertake, that is, undertake company activities other than providing credit and other services for landless persons in rural areas. In other words, can purported companies created by Grameen Bank do indirectly what Grameen bank itself cannot do, the said purported companies being born of Grameen Bank (validly or invalidly even!)?
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
There was transfer of funds received by Grameen Bank from NORAD without prior authorisation of the Government and other regulatory bodies. The offences arising are multiple in nature: (i)“conversion” in criminal law; (ii) avoidance of tax payment (per Grameen Bank’s Reply to Bangladesh Bank’s Audit Report); (iii) elements of fraud upon Grameen Bank itself, the NBR, the Government, the shareholders of Grameen Bank, the laws of Bangladesh and the people of Bangladesh.
In this unauthorised transaction the status of the parties, namely, (i) Grameen Bank, as recipient of a donation, was converted to become a borrower; (ii) the donor, NORAD’s role was converted to funding an activity not approved by the Government; (iii) ERD, which had permitted housing loans to be extended by Grameen Bank; (iiii) the new lender, Grameen Kalyan, was caused to undertake unauthorised lending since it had no licence from Bangladesh Bank to function as a financial institution. (See Grameen Kalyan’s Memorandum and Articles for the requirement of obtaining license from Bangladesh Bank to undertake lending activities which it had not done!)
Apart from the issue of whether Grameen Bank has the legal capacity to incorporate a company which does not provide for the rural landless poor, the issue which arises is the status of the income earned by Grameen Telecom. Is Grameen Bank or Grameen Telecom entitled to hold such income in separate funds and accounts that have no nexus with the Grameen Bank’s statutory function to provide loans to landless persons in the rural areas?
Translated by Mr Google from http://www.nrk.no/programmer/tv/brennpunkt/1.7419927
Norad’s fresh account of the Norwegian aid money for the Grameen Bank differs in several respects from the words of the secret stamped documents that have been in Norad’s archives since 1998. Norad looked away from 109 million at the time, according to the Norwegian Embassy in Bangladesh, was tapped from Grameen Bank.
Published 3:10 p.m. today.
5. May 1998 sent the Norwegian Embassy in Dhaka in Bangladesh, a note to Norad stamped “confidential”.
Here it was pointed out that “one of the closest people to Professor Muhammad Yunus” has contacted the embassy and “proposed a compromise”.
The reason was the Norwegian requirement that 608 million kroner, which had been transferred from Grameen Bank to a newly created company (Grameen Kalyan), in its entirety must be returned to the Grameen Bank, which along with Yunus received the Nobel Peace Prize in 2006.
Of the total amount of 608 million kroner was, according to the Norwegian Embassy roughly 279 million provided by Norway.
The compromise was, according to the aforementioned letter from the embassy on that 120 million given in aid from Norway as a “final solution” returned to the Grameen Bank, “against the remaining funds allocated to the Grameen Bank on loans and revolving funds remain in the Grameen Kalyan ownership “.
Here is the conclusion that 170 million was returned to the bank from Grameen Kalyan after negotiations between Norad and the Grameen Bank, and that it was never entered into any compromise:
“With this, Norad and the Embassy’s requirements met. When the embassy in a letter dated 05/26/1998 coined the term “compromise”, it was linked to the Grameen Bank’s invitation to negotiate a compromise.Embassy and Norad had met all their demands for negotiations. “
This stands in contrast to the secret stamped documents Brennpunkt found in Norad’s archives. It says that the Embassy and Norad wanted the following Norwegian kroner assistance should be returned to the Grameen Bank:
Overall, this is 279 million Norwegian kroner assistance, the Embassy of Norad’s support demanded that Yunus and his men would return to the Grameen Bank.
So this is 109 million more than the 170 million who Norad in his report wrote that was returned from Grameen Kalyan Grameen Bank.
|Norad report 2010:||Embassy / Norad in 1998:|
|Phase IV:||106 million||120 million|
|Phase III:||64 million||64.8 million NOK|
|Additional Appropriation:||NOK 0||94.25 million NOK *)|
|*) According to the embassy was “the largest component” of this amount to the mortgage. The exact amount will not provide the documents, but said the embassy was “reasonable to consider these funds as a natural resident of the revolving fund and not as temporarily Grameen Bank can give to another institution for a new application.”|
There are two circumstances in which the discrepancy is not explained by Norad.
Firstly, the embassy wrote in 1998 that the support given to the revolving funds in the contracts under Phase IV was 120 million. Norad report writing, however, that the amount that was reversed during Phase IV was 106 million. Norad not explain the difference of 14 million.
Second, Norad away from the aid of 94.25 million crowns provided as additional appropriations. The largest component of this was the mortgage for flood victims who Embassy / Norad then in the secret documents that had demanded be returned from Grameen Kalyan Grameen Bank.
Despite the fact that Norwegian aid authorities at the time believed that all these Norwegian amounts were unlawfully tapped from Grameen Bank, they went in for a compromise. In the aforementioned letter from the embassy to Norad 5 May 1998 justified this by saying that Norway is not the law in hand expect more:
“After the embassy’s view compromise proposal represents a satisfactory solution in relation to what might be applicable legal and contractual.”
It is also worth noting that Norad’s statement does not take up the aid money from other countries and institutions that were transferred from the Grameen Bank Grameen Kalyan.
Grameen Bank was under the Phase III funding from the Assistance Consortium, consisting of NORAD, SIDA, IFAD, CIDA, GTZ, KfW and the Ford Foundation. Together, these institutions contributed with 420.4 million to the revolving funds in the period 1989-92.
In 1998, the contact Norad, SIDA, the Swedish aid authorities to notify them of the transactions from the Grameen Bank Grameen Kalyan. Focus has been told that from SIDA, the Swedish contribution during Phase III was the entire 190 million.
SIDA, however, chose not to pursue the matter, because they did not want to destroy the “credibility of the Grameen family,” as it says in a letter from the Swedish Embassy in Bangladesh, dated 17 March, as the Focal Point has received from SIDA:
“No one wants two make a big thing out of this as It Might angry the creditability of the Grameen family and pray That Would detrimental two the whole Cause.”
Based on the secret documents Brennpunkt found in Norad’s archives, there are many factors that the public still have not received an explanation or full access to:
Read more Here.
A study last year by World Vision found Bangladesh had the highest rate of child marriage in the world. Fifty-three per cent of girls were married before the age of 15, it said.
“The Rajendrapur Conversation will be an annual conversation between architects, engineers and poverty researchers in the North with poor people, ngos and practitioners in the South. It is a partnership between the Brooks World Poverty Institute at The University of Manchester and the BRAC Development Institute, Rajendrapur, Bangadesh.”
Good old Joseph Stiglitz is involved and my ex-head of department, Prof David Hulme, when i was at the IDPM in Manchester!
As some of the world cup qualifiers get underway this weekend, I am thinking about the remarkable management style of the Bangladesh Football Federation. Remarkable in its short-sightedness that is. We haven’t qualified even at the pre-qualification stage for the World Cup in 2010 but there are other local tournaments coming up (Mardeka cup in Malaysia for example) and you wonder why you would give a coach a three and a half month contract ( as they have done to Shafiqul Islam Manik)? The reason given is that Bangladesh has had a lot of grief with local coaches and so an evaluation period is required. They seem to not understand that successful coaching takes a little longer than 3.5 months…. Since Argentinian Diego Cruciani was sacked for slapping an Indian referee ( is that not grief of sorts also), the national team have not known stability. You would think that with the recent injection of money from CityCell the matbors in the federation would take a serious look at the game and its management? Not yet it seems.
Anyway, I shall be waving the flag for a crushing win by England against Andorra this saturday. But no doubt it won’t happen or at least not a “crushing win.” Cuba are playing the USA. That should be fun. France - i shall be watching Nasri’s performance keenly. And South Africa versus Nigeria - will the super eagles crush the host country. Maybe SA need a wake up call?
You make a lot of acquaintances when you start a blog. There are some inspirational characters out there. Among them I would mention House Negro’s blog. There are some nutters too. Yes bengali ones. But Mr Lodhi is in a category of his own. His comments on posts are always entertaining and filled with multi-layered meaning, sarcasm and irony. He sometimes loses it though and THIS POST HERE, where he takes Drishtipat to task, is the text version of the angry german kid video! It all started “innocently” with his habit of signing himself as Md[pbum].
Uncle Karl was born today. These days he adorns hip fashion gear more than anything else. Is that good or bad? Bit of both, I reckon. What do you think?
The 10th International Short and Independent Film Festival has got underway in Dhaka. An excellent collection of films is being shown over the next week or so. And of course it features our own Swapnabhumi - The Promised Land. The festival’s goal is this:
The festival welcomes films of artistic merit and creative expression with a commitment to social and cultural harmony, secularism, sustainable ecology and the rights of women, children and minority communities.
Go to Events for schedule, venue, name of film etc. And if you do go and see Swapnabhumi be sure to give me your views on it.
Victory Day in Bangladesh and Reconciliation Day in South Africa.
And as I am currently located in Glasgow, here is a fitting prayer for this day from Scotland:
Then let us pray that come it may,
As come it will for a’ that.
That sense and worth o’er a’ the earth,
Shall bear the gree, an’ a’ that.
For a’ that an’ a’ that,
It’s coming yet for a’ that,
That man to man, the world o’er,
Shall brothers be for a’ that.
Ah it has become an annual thing this…thanks to everyone for their emails and sms. I should put on my D&G shades and in best film-maker style wave and blow you all kisses.
So it was our press day today 28th November for Swapnabhumi - The Promised Land. The public show was a sell out. Response has been very positive and some people are even “ecstatic.” LOL.
Seriously though, our documentary comes at a critical point for the Bihari community. Only yesterday the High Court asked the authorities why the Biharis should not be enrolled on the voter-list. It is our hope and wish that our film will make a difference in some way. This film is an appeal for “acknowledgement”…in the biggest sense of that word. And its an appeal to start here and move on.
Hopefully those of you outside Bangladesh will see it soon. Check the web site for details. http://www.swapnabhumi.com - yeah ok, it isnt done it…no fault of our redoubtable designer the great Catalin Dantis, designer for Porsche and owner of two male turtles. Rather, the fault is mine and my hospital-filled timetable.
The cartoon says “Save me!” It depicts Bangladesh as a tree shot through with parasites ( corruption). The irony is that the cartoonist who created the above cartoon is in need of saving himself from the corrupt polity that is Bangladesh. Old Arif - he is only 20 - is in jail for insulting the sentiments of a certain very toxic special interest group.
In case you are wondering, I did not tag on the Md. at the beginning of his name. It seems he used to use it in 2005 when he won a prize for this cartoon in a competition organised by Transparency International. Head over to Rezwan’s page to get the low down.
I find his mix of humour and social commentary very compelling. This scupltor is not only talented but he is also quite fearless. I can’t wait to see his work in the future. And oh yes, I own that statue you see…
pic with N95 at the Bengal Gallery
I came across a particularly odious Bangladesh related blog recently. I could only read one article and so really I cannot comment on the rest of this cretin’s blog. The particular post I refer to is entitled “What kind of culture embraces wrestling but rejects toilet paper?” He is on a PRA exercise in Sylhet with his NGO and makes this puerile and stupid observation. I guess he wants to appear funny and smart to his mates back home.
It was many years ago when I first read Robert Chambers’ eloquent critique of PRA techniques. They are a move away from traditional and fruitless methods used by geographers, anthroplogists, economists etc but like any social technique there are inherent weaknesses. And with people like the cretin above, deeply mired in prejudice and his own “values,” such methods don’t have a hope in hell.