Battles in Grameen Bank Family: The Question of Legality

I just can’t help wondering why Professor Yunus is doing things that do not match up to his position as a Nobel laureate. We saw a number of Nobel laureates including our Kabiguru Rabindranath Tagore whose every penny went to charity. However, Dr. Yunus seems to be nothing of the kind. He seems rather to have been pursuing a course of personal aggrandizement. It is an undeniable fact that he is the founder of Grameen Bank and both him and the bank were awarded Nobel Prize in 2006 for peace. Though the bank was originated in 1976 as a research project, it was transformed into an independent bank in 1983 by government legislation and is expected to be run by it.  

Knowing it full well, Professor Yunus after winning the Nobel Prize started thinking he was above the law, and that is the real crux of the problem. He could not gracefully accept his removal first from the post of Grameen Bank Managing Director, and then fromGrameen Telecom and Grameen Kalyan Chairman which was done as per the rule and conventions.  Now he is fighting legal battles. He has every right to get legal protection, but he should not think he is a law unto himself as a Nobel laureate.The court ruling will finally uphold the legality of the matter.

Grameen Bank Board of Directors Chairman Dr. AKM Saiful Majid has recently nominated three directors in Grameen Telecom and two directors in Grameen Kalyan from Grameen Bankby virtue of the decision of the 155th meeting of Grameen Bank Board of Directors.He has also nominated chairman in both institutions from Grameen Bank replacing Dr. Muhammad Yunus. When the newly appointed chairman and directors went to take charge at the Grameen Telecom Bhaban located in Mirpur, a conflict situation arose with the existing working Grameen Telecom and Grameen Kalyan directors.In this context, a press conference was held in mid-February February 2024 at Yunus Center located in Grameen Telecom Bhaban. Dr.Yunus and Managing Directors of Grameen Telecom and Grameen Kalyan alleged in the press conference that Grameen Bank's nomination of their own persons as Chairman and Director of Grameen Telecom and Grameen Kalyan is nothing but “a blueprint for harassing Prof. Yunus to the countrymen and destroy his acceptable social business organization worldwide.”

In such a situation, questions arise as to under what authority Grameen Bank has appointed chairman and director in the two institutions. What is its legal basis? Who are the real owners or controllers of Grameen Telecom and Grameen Kalyan? To get the answer, we need to know the formation process of these two institutions.

There is convincing evidence of the fact that in the 37th board meeting of the Grameen Bank Board of Directors held on 16/11/1994, Grameen Bank was given permission to join a consortium with other investors and also set up a separate 'not for profit' company called 'Grameen Phone'. According to the decision of the said board meeting on 8/10/1995 a company called 'Grameen Telecom' was created as per 'Company Act-1994'.According to the memorandum of the company, Grameen Telecom will have a maximum of 25 members and Grameen Bank can nominate a maximum of 10 of them. Also, Grameen Telecom's Articles of Association 32 Article No. 3 states that Grameen Bank shall nominate three members of the 10-member Board of Directors of the institution and Article No. 51 states that the Chairman of Grameen Telecom shall be a person nominated by Grameen Bank.

In the 41st Board meeting of Grameen Bank held on 01/12/1995, the Board of Directors was informed about the establishment of a separate company named 'Grameen Telecom'. In the meeting, it was decided to provide a long-term loan of Tk 30 crore to Grameen Telecom from Grameen Bank's own fund 'SAF' fund at 11% simple interest. It was also decided in the said meeting that apart from paying 11% interest on the loan given from the 'SAF' fund, Grameen Telecom will pay at least 50% of its share to the 'SAF' fund. Therefore, it is undeniable that Grameen Telecom was established as per the decision of the Board of Directors of Grameen Bank and with the financial assistance of Grameen Bank.

Now let's talk about rural welfare. In the 42nd board meeting of the Grameen Bank Board of Directors held on 25/04/1996, the proposal to form a separate institution called 'Grameen Kalyan' under the 'Company Act-1994' was approved for the welfare of the members and employees of the Grameen Bank. It was further decided in the said meeting that after the establishment of 'Gramin Kalyan' the amount received by Grameen Bank as grant for loan from various donor agencies and Grameen Bank's SAF fund will be transferred to Grameen Kalyan.

On 4/11/1996 an institution called 'Grameen Kalyan' was created under the 'Company Act-1994'. According to the memorandum of articles of the institution, Grameen Kalyan will have a maximum of 25 members and among them Grameen Bank can nominate a maximum of 10 people. Grameen Kalyan's Articles of Association 32 Article No. 3 states that Grameen Bank shall nominate two members of the 9-member Board of Directors of the institution and Article No. 48 states that the Chairman of Grameen Kalyan shall be a person nominated by Grameen Bank.

On 31/12/1996 Tk 347.18 crores of grant received by Grameen Bank from donors and Tk 44.25 crores of Grameen Bank's own funds SAF Fund were transferred to Grameen Kalyan. Later, due to the objection of the donor organization NORAD, Tk 347.18 crores of grant was returned to Grameen Bank in two installments on 31/12/1997 and 01/11/2003 but the SAF fund was not returned. In addition, after 1996, another Tk 25.57 crore of Imputed Interest was given to Grameen Kalyan. That is, the total amount of money given to Grameen Kalyan from Grameen Bank is Tk 69.82 crore, as confirmed by reliable sources. Therefore, it is undeniable that Grameen Kalyan has been established as a subsidiary of Grameen Bank and Grameen Bank's own fund SAF Fund for the purpose of doing the welfare work of the members of Grameen Bank.

Therefore, it is clear that both Grameen Telecom and Grameen Kalyan were created with the direct financial assistance of Grameen Bank as per the decision of the Board of Directors of Grameen Bank. The article of association of these two institutions clearly mentions the matter. Dr. Muhammad Yunus was appointed as the chairman of both institutions as the representative of Grameen Bank. Although he resigned from the post of managing director of Grameen Bank in 2011 on the orders of the court, he did not leave the post of chairman of these two institutions. It should also be noted that even till 2020, these two institutions had Grameen Bank nominated directors. Therefore, there is no breach of legality nor of convention in the appointment of Chairman and Director in Grameen Telecom and Grameen Kalyan by Grameen Bank. Rather, Dr. Muhammad Yunus has acted as the chairman of the two institutions in an illegal manner.

Dr Yunus may have thought that he would remain the life Managing Director of Grameen Bank and would be enjoying facilities from the rest of the organizations. Since he is no longer the Managing Director of Grameen Bank, he is not supposed to have any legal entitlement to Grameen Bank’s decision. Similarly, since the organizations are being run by Grameen Bank, the decisions taken by the directors of Grameen Bank and its offshoots-- Grameen Fund and Grameen Kalyan are the final decisions. Therefore, Dr. Yunus’ or anybody else’s interference in this is no desirable. Since he avowedly believes in the empowerment of individuals and institutions/organizations, he should be happy to see that organizations established by him are gradually being self-reliant and independent. His name would be stamped indelibly on the memory of the organizations.If he plants trees in the name of social welfare, but runs for profit and wants to enjoy the fruits up until his death,people must look askance at him. -Source: daily asian age