Yunus' Grameen Bank exposed, Bangladesh govt orders probe

DHAKA: The Bangladesh government has ordered a “thorough” probe into allegation that Nobel Laureate Muhammad Yunus transferred nearly $100 million originally meant for microcredit operations of his Grameen Bank to his another venture to avoid tax.

Prime Minister Sheikh Hasina on Sunday said that Grameen Bank’s exposure to the controversy could have occurred as it tried to play a “trick” to evade government taxes by transferring $100 million to a non-profit sister venture of the bank.

“There should certainly be a thorough investigation to find out what actually happened,” she said. Ms Hasina also appeared critical of the “very high” interest rate the bank charged its poor clients, saying their microcredit mechanism did not allow the poor to come out of the poverty cycle as “micro-financiers nurse poverty to run their brisk business”.

“Many examples are set in Bangladesh. It was an example of wizardry how one could play with (donor provided) people’s money,” Ms Hasina said. However, finance minister AMA Muhith earlier defended Ms Yunus and said, “I see no fault in the transfer of the fund, if their (Grameen Bank) claim (of doing so under an understanding with the Norwegian government) is true.”

Meanwhile, Mr Yunus welcomed the government probe. “Prime Minister Sheikh Hasina said the issue on Grameen Bank, which was discussed in several newspapers, should be investigated. I welcome such initiative,” Mr Yunus said in a brief statement on Sunday.

A Norwegian TV documentary aired last week had exposed Grameen Bank to a massive controversy. Mr Yunus, who won the Nobel Prize in 2006 for his efforts in making Grameen Bank a microfinance organisation and community development bank that provides small loans to the impoverished, said, “I am confident that this (investigation) will resolve the matter and bring the truth to the citizens of Bangladesh as soon as possible”.

Earlier, Grameen Bank said in a statement that there was nothing secretive about the transactions. “It was a matter of honest disagreement (with the foreign donor),” said the statement on Friday. The nearly 2,000-word statement said the Grameen Bank Board took the decision to transfer the amount to Grameen Kalyan from Grameen Bank in 1996 with “due deliberation, good faith, and with good intentions to benefit the poor”. “There was no wrongdoing in the agreement between Grameen Bank and Grameen Kalyan (to transfer the amount),” it said.