The High Court on Monday (March 18) scrapped Labor Appellate Tribunal’s order that had stayed the effectiveness of the jail sentence awarded to Nobel laureate Professor Muhammad Yunus and three others in a Labor Law violation case.
The bench of Justice Md Nazrul Islam Talukder and Justice Kazi Ebadoth Hossain announced the verdict today saying the conviction (six-month jail term) will be effective against the four accused, Dr. Yunus, chairman of Grameen Telecom, and its directors Ashraful Hassan, Nurjahan Begum, and M Shahjahan — until their appeals are disposed of.
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It also said Prof Yunus and three others must inform the Labor Appellate Tribunal if they go abroad. On January 28, the Labor Appellate Tribunal granted bail to Yunus and three others in the labor law violation case following separate appeals filed by them.
Why Dr Yunus Facing Six Months Jail Term?
Dhaka Labor Court-3 on January 1 sentenced Nobel laureate Dr Muhammad Yunus and three top officials of Grameen Telecom to six months in jail, with a fine of Tk 25,000 each for violation of labor law. Soon after the verdict, the same court granted bail to all four for a month, following separate bail pleas.
According to the case documents, Department of Inspection for Factories and Establishments (DIFE) officials inspected the Grameen Telecom office in the capital’s Mirpur on August 16, 2021, and found several violations of labor laws there.
These violations encompass:
- Failing to make laborers and employees permanent upon completing their apprenticeships (a violation of Section 4(7) of the Bangladesh Labor Act),
- Not granting workers and employees annual leave or wages in lieu of leave (contrary to Section 117 of the Bangladesh Labor Act), and
- Non-payment of 5 percent of profits to labor welfare under the Labor Welfare Foundation Act of 2006, as well as the non-establishment of labor welfare and workers’ participation funds.
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On August 19, 2021, the department sent a letter to the Telecom, saying the company did not regularize the job of 67 of its employees although the company should have done so.
Besides, the company did not set up the employees’ participation and welfare funds and did not pay the mandatory 5 percent of the company’s dividends to the workers, the case statement said.
On September 9, 2021, Labour Inspector (General) SM Arifuzzaman filed the case against Yunus and the three others, rather than against the company. Later on 7 December 2021, Prof Yunus filed a petition with the High Court seeking scrapping of the case and the HC stayed the procedure of a case for six months on 12 December.
On 5 June 2023, the Labor Court ordered the trial in the case through framing charge sheets against the accused. Later, Dr Yunus filed a petition with the HC seeking cancellation of the charge framing order. Subsequently, on 8 August, the HC rejected the petition. Later, the Nobel laureate filed a petition with the Appellate Division seeking cancellation of the charge framing order. The division led by the chief justice cleared the petition after hearing it on August 20, 2023.
‘Pro-People Economist’ To Tax Fraud: A Deceitful Journey
During the tax years of 2011-2012 and 2013-2014, Dr. Yunus transferred TK 760 million to three of his non-profit trusts – Professor Muhammad Yunus Trust, Yunus Family Trust, and Yunus Centre – in an apparent attempt to evade taxes.
The National Bureau of Revenue (NBR) audited the matter and demanded TK 160 million in accordance with the Gift tax law against these donations as a result of this abnormal decline in tax payment accompanied by a substantial donation.
Dr Yunus claims that the above trusts are for social business and his family members will not be beneficiaries but the NBR investigations suggest otherwise. Dr Yunus and his family controlled the trusts and the trusts’ constitutions included provisions for his family’s sustenance and gave him the sole discretion over how to spend the trusts’ assets. Experts said that Dr Yunus transferred Tk 760 million only to avoid taxes though he denied the claim. After a long legal battle, Dr Yunus had to pay 12.28 crore Taka in taxes following the court order.
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From 1997 to 2022, Dr Yunus got engaged in widespread tax evasion by transferring a total of BDT 977 billion to the accounts of Yunus and his affiliated organizations from Grameen Telecom’s operational council. Dr. Yunus donated a sum of Tk 76 crores, 73 lakhs, and 34 thousand to his three trusts. Total tax evaded (As of 2022): Approximately 10 billion Taka.
According to the tax documents related to Dr Yunus’s tax evasion cases—
After 2003, Dr. Yunus concealed 189,434,835 Taka in remittances in his tax file for the 2005-06 tax year. However, his personal South East Bank (Account Number – 0212100020061) shows that he received 1,159,896,224 Taka in remittances during that time. This means that he concealed 189,434,835 Taka in remittance income from the government in his personal tax file, with the intention of evading taxes.
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From the 2005-06 tax year to the 2022-23 tax year, he concealed 189,434,835 Taka in remittance income to evade taxes. Interestingly, in the 2020-21 fiscal year, Dr. Yunus withdrew almost all the money from his personal account to form the ‘Yunus Trust’. Trust funds are exempt from income tax. However, a 15% tax is payable on such funds, which he did not pay. This tax evasion led to a lawsuit against him, which he lost in three courts.
To evade taxes, Dr. Muhammad Yunus concealed large amounts of remittance income in his personal tax file in various tax years. Earlier, after winning the Nobel Prize in 2006, he mentioned receiving a total remittance of 97 crores 4 lakh 61 thousand 191 BDT in the 2005-06 tax year.
However, during that time, he received 115 crores 98 lakh 96 thousand 24 BDT in his personal Southeast Bank account as remittances. This means he concealed information about receiving 18 crores 94 lakh 34 thousand 835 BDT in remittances in his personal tax file.
In addition, Dr. Yunus has been widely accused of evading taxes by forming various shell companies and donating the profits of one company to another. For example, Dr. Yunus transferred 36 billion Taka from the accumulated 5% dividend of Grameen Telecom’s employee welfare fund to another company as a donation.