Key highlights:
- Yunus contributed Tk 76 crores, 73 lakhs, 34 thousand to three institutions known as Yunus Trust, Yunus Family Trust, and Yunus Center Trust.
- Dr. Muhammad Yunus and 12 others faced accusations of misappropriating Tk 252.2 million from Grameen Telecom’s Workers Profit Participation Fund in a money laundering case.
- Grameen Telecom faces a range of accusations, including the misallocation of 5% of the employee distribution dividend
- Yunus found himself in a retirement dispute in March 2011 when he was asked to step down as the CEO of the bank for violating the country’s retirement law.
The nation was abuzz with the news of punishment given to Dr. Muhammad Yunus by the Labor Court in Dhaka today. While reading out the verdict, the court said, “Dr Yunus is not tried as the Nobel-Winner, he is being tried as the chairman of Grameen Telecom. And allegations of violation of labor law have been proven against him.”
Anti-Corruption Commission leveling allegations against Professor Dr. Muhammad Yunus and 12 others. They had been summoned for questioning regarding a money laundering case, with accusations of misappropriating Tk 252.2 million from the Workers Profit Participation Fund of Grameen Telecom.
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However, a significant turn of events unfolded on 1st January, 2024, as Dr. Muhammad Yunus, along with three others of Grameen Telecom CEO Md Ashraful Hassan, Managing Director M Shahjahan, and Trustee Nurjahan Begum, was sentenced to six months in jail by a Dhaka court for labor law violations.
The verdict, announced by Dhaka Labor Court 3 Judge Sheikh Marina Sultana on Monday, resulted in a fine of Tk5,000 under one section and Tk25,000 under another. Bail was granted after separate petitions were filed. The court has given them one month to file an appeal in the High Court to contest the judgment.
The case, which concluded arguments on December 24, involved Dr. Yunus facing over 100 other charges related to labor law violations and alleged graft. The charges stemmed from the department’s observation of various violations during an inspection at Grameen Telecom, such as not making the jobs of 101 workers permanent, not establishing a workers’ participation fund and welfare fund, and failing to allocate 5% of the company’s dividend to workers.
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Yunus in Legal Hot Water Over Major Allegations
Grameen Telecom’s top management faces a range of accusations, including the misallocation of 5% of the employee distribution dividend due to irregularities, the unauthorized deduction of 6% labeled as lawyer’s fees and other expenses when disbursing employee dues, and the transfer of Tk 2,977 crores to various subsidiary bank accounts for money laundering and embezzlement, totaling Tk 45 crores, 52 lakhs, 13 thousand, and 643, inclusive of interest allocated to the workers’ welfare fund.
He generously contributed Tk 76 crores, 73 lakhs, 34 thousand to three institutions known as Yunus Trust, Yunus Family Trust, and Yunus Center Trust. The Deputy Commissioner of Taxes imposed a cumulative tax of Tk 15 crores, 39 lakhs, 16 thousand, and 800 during the fiscal years 2011 to 2013.
Under Yunus’s supervision, Grameen Telecom submitted misleading annual returns to the Registrar of Joint Stock Companies and Firms (RJSC). In the returns, the company falsely declared that no dividends were distributed, a violation punishable under Section 397 of the Companies Act, 1994, despite substantial sums being distributed to Grameen Kalyan over the years.
The transfer of dividends to Grameen Kalyan led to the forfeiture of Grameen Telecom’s non-profit status under Section 28 of the Companies Act. The potential cancellation of Grameen Telecom’s license under Section 28 is at the discretion of the Registrar of Joint Stock Companies and Firms (RJSC), who holds the authority to revoke the license in accordance with the law.
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Power Play Gone Awry
In 2007, when a caretaker administration, backed by the Bangladesh Army, took control, Dr. Yunus immersed himself in a contentious political endeavor. Despite a ban on all political activities at the time, he established a political party and sought approval to commence his political engagements.
On February 11, 2007, Dr. Yunus appealed for public backing to create a political party aimed at “reforming” the country’s politics. Nevertheless, the public rejected his party, and through adept maneuvering and a dubious behind-the-scenes agreement, his attempt at power intrusion was thwarted.
Regrettably, this esteemed Nobel laureate has unequivocally supported devaluing the constitution by advocating for elections under a caretaker government, suggesting that without such an arrangement, his financial interests would be affected.
Yunus and the Unsettling Path of Ethical Erosion
Through Grameen Bank, Yunus spearheaded the revolutionary idea of extending microcredit to millions of rural women, marking a significant stride in alleviating poverty. His approach earned him the Nobel Prize in 2006, recognizing his innovative efforts in using microcredit to empower numerous women in rural areas.
However, a critical examination of Grameen Bank’s debt recovery strategy raised concerns about the influence of profit-driven motives and the pervasive hand of greed. This unveils Professor Dr. Yunus’s gains and self-interest within the framework of Grameen Bank, shedding light on previously concealed aspects.
In stark contrast, it is noteworthy that the government’s initiatives for poverty alleviation in Bangladesh operate without the invisible hand of profit, distinguishing them from institutions such as Grameen Bank.
Dr. Yunus faced accusations of vehemently opposing the World Bank’s funding for Bangladesh’s major infrastructure project, the Padma Bridge. When retracting the opposition, Yunus publicly decried high-level corruption within the government. However, in 2017, a Canadian court dismissed corruption allegations against Bangladesh, suggesting that the claims were strategically motivated.
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“There were no credible grounds to cancel the loans, and none of Bangladesh’s partner countries had defaulted on their repayments.”
– Former World Bank President Robert B. Zoellick
The controversy still echoes as a clear conspiracy. Ultimately, it was revealed that Zoellick was compelled to sign the fund cancellation documents as his final duty before concluding his service.
Yunus found himself in a retirement dispute in March 2011 when he was asked to step down as the CEO of the bank for violating the country’s retirement law, which sets the retirement age at 60—Yunus being 70 at the time. Although offered the role of ‘Emeritus Adviser’ by the Bangladesh government, Yunus refused and took legal action against the government. Despite a rigorous legal battle in the Appellate Division of the Supreme Court, Yunus lost the case.
Subsequently, he sought support from abroad, particularly from the United States and various international organizations, in a bid to reclaim his position.
The controversy surrounding Yunus escalated as economists accused him of profiting from the plight of the poor through the imposition of steep interest rates. Dr. Kazi Khaliquzzaman Ahmad, PKSF Chairman, characterized microfinance as a ‘death trap’ for the impoverished in Bangladesh.