Grameen Bank's Muhammad Yunus Summoned to Court by Bangladesh Government Why Is Bangladesh Going After Grameen Bank and Founder Muhammad Yunus?

The government of Bangladesh appears to be mounting a concerted campaign oust Muhammad Yunus and take over the Grameen Bank.

The government of Bangladesh appears to be mounting a concerted campaign to hinder and possibly take over the Grameen Bank. Nobel laureate, and Grameen founder, Muhammad Yunus has been summoned appear in court on January 18 on charges of defamation. This comes just a month after the prime minister—a former supporter of microfinance—declared microlenders were "sucking blood from the poor in the name of poverty alleviation" and announced a "high-level" investigation into a decade old—and previously resolved—claim of financial impropriety. Yunus was even forced to issue a statement denying claims by some in the government that he had resigned.

Corruption? Defamation?

The investigation announced by Prime Minister Sheikh Hasina Wazed last month, follows questions raised in the Norwegian television documentary program Brennpunkt about a $100 million transfer of Norwegian aid money from one Grameen entity to another back in 1996. Norad, the Norwegian development agency, felt that move a violation of a clause in the aid contract and said as much.

In 1998, Norad asked Grameen to move the funds back. Grameen did so, and all was settled amicably. Grameen:

The concerns brought up by Norad and the Norwegian government were treated with the utmost seriousness by Grameen Bank and Professor Yunus, and both sides worked to resolve the differing interpretation of a clause in their initial Agreement and arrive at a solution in a satisfactory manner. By restoring the status quo the matter was amicably resolved. It never came back since then. None of the parties involved felt aggrieved.


In a 1998 letter, Yunus explained that his organization made the transfer because the Grameen Bank was unsure if it would lose its tax-exempt status at the end of that year, so it set up Grameen Kalyan, a separate nonprofit organization, to receive the money and lend it back to Grameen Bank. The tax would have been 40 percent, Grameen says, and could have reduced the anti-poverty work the organization would be able to out with the Norwegian money.

Bangladesh's Finance Minister Abul Maal Abdul Muhith told bdnews24 "I see no fault in the transfer of funds if [Grameen's] claim is true." That appears to be the case. And it appeared to be the case a dozen years ago as well.

The Norwegian government investigated and issued a report exonerating Grameen Bank and Yunus after their funds were transferred back. Norwegian Finance Minister Erik Solheim declared: "According to the report, there is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds ..."

It's not as if the government itself was kept in the dark about the transfer. In the lengthy rejoinder posted on Grameen's website, the bank points out that board of directors was fully informed and approved the transfer. That's relevant because three of the 12 board members, including the chair, are appointed by the government. That partly explains why the general tone of the Grameen response to this set of accusations has been shock and outright denial of all charges. The corruption investigation is likely to proceed nonetheless—just one prong of a series of recent anti-Yunus sentiment.

The defamation charges are separate. They stem from allegations that, in 200,7 Yunus essentially said politicians in Bangladesh pursue only money. The charges were filed that year and are just now being dredged up. The penalty could be prison time. As Philanthrocapitalist points out, Bangladesh ranks terribly on corruption scales; a fair trial is not guaranteed.

What's the Government Plan?

Several microfinance industry experts around the world, including Nicholas Kristof of The New York Times, are saying these actions amount to a move by Prime Minister Sheikh Hasina Wazed to wrest control of the bank from Yunus. Kristof put it bluntly: "given the timing, it sure looks as if this is an orchestrated campaign to take him out, and seize the bank for the government." He speculated on possible motivations:

"...the present campaign against Yunus doesn’t ring true to me, or to some others who are watching. (I’ve spoken to people on three continents, on all sides of this issue, but people are afraid to speak openly). I just don’t know what is going on. It may be that the government worries that Yunus will enter politics, or criticize politicians—and they may also be salivating at the prospect of gaining control over Grameen, which touches one person in three in Bangladesh."


Yunus did make a short foray into politics a few years ago, a move The Economist says earned him "powerful enemies among Bangladesh's politicians." During a period governed by a military-backed caretaker government, Yunus began forming a political party, then quickly dropped the plan. That was enough to put current Prime Minister Sheikh Hosina on guard. Analysts say the two have never made amends.

Owning Grameen Bank

Currently, borrowers own the majority of the Grameen Bank, with Yunus acting as managing director. The government already has 25 percent of the board, and can legally control up to 25 percent of the bank, though, as Kristof notes, borrowers have paid in more capital and, as of 2009, the government stake was down to 3.4 percent. At one point the government did control a majority share of the bank, and miraculously it was still permitted to function as an independent entity for the most part. That does not appear to be the intent of Hosina this time.

If The Economist, Kristof, and others are right and the government wants to increase their stake to a controlling share with a majority on the board, Yunus would almost certainly be voted out. That's huge. Grameen Bank shared the 2006 Nobel prize with Yunus. It is the industry standard bearer to the public. Without its founder and without independence it most certainly wouldn't be the face of microfinance anymore, let alone how the actual practices and lending might change. Additionally, the move would have a chilling effect on other Bangladeshi organizations like BRAC.

There have been numerous criticisms of microfinance in recent years ranging from the lofty—not delivering on the promise to end poverty—to the fatal—high debt drives borrowers to suicide. Across the border in India, the government of Andhra Pradesh is encouraging borrowers not to pay back their loans. We explained that crisis in an earlier post. Many of these claims are valid, and there's much improvement to be had across the industry, especially at the goal of alleviating poverty. But a politically motivated, shaky legal attack on Yunus is no way to foster any kind of improvement in microfinance.

Microfinance is growing, but it is also at a crossroads, and Muhammad Yunus is still the flag-bearer for the industry. Every microlender will suffer if Bangladesh nationalizes (again) the Grameen Bank in a hostile takeover. Expect supporters to rally around Yunus in the coming month.

Image: (CC) Muhammad Yunus by Tanveer Islam.

via Thomas Ledia / Wikimedia Commons

On April 20, 1889 at the Braunau am Inn, in Upper Austria Salzburger located at Vorstadt 15, Alois and Klara Hitler brought a son into the world. They named him Adolph.

Little did they know he would grow up to be one of the greatest forces of evil the world has ever known.

The Hitlers moved out of the Braunau am Inn when Adolph was three, but the three-story butter-colored building still stands. It has been the subject of controversy for seven decades.

via Thomas Ledia / Wikimedia Commons

The building was a meeting place for Nazi loyalists in the 1930s and '40s. After World War II, the building has become an informal pilgrimage site for neo-Nazis and veterans to glorify the murderous dictator.

The building was a thorn in the side to local government and residents to say the least.

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For years it was owned by Gerlinde Pommer, a descendant of the original owners. The Austrian government made numerous attempts to purchase it from her, but to no avail. The building has served many purposes, a school, a library, and a makeshift museum.

In 1989, a stone from the building was inscribed with:

"For Peace, Freedom

and Democracy.

Never Again Fascism.

Millions of Dead Remind [us]."

via Jo Oh / Wikimedia Commons

For three decades it was home to an organization that offered support and integration assistance for disabled people. But in 2011, the organization vacated the property because Pommer refused to bring it up to code.

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In 2017, the fight between the government and Pommer ended with it seizing the property. Authorities said it would get a "thorough architectural remodeling is necessary to permanently prevent the recognition and the symbolism of the building."

Now, the government intends to turn it into a police station which will surely deter any neo-Nazis from hanging around the building.

Austria has strict anti-Nazi laws that aim to prohibit any potential Nazi revival. The laws state that anyone who denies, belittles, condones or tries to justify the Nazi genocide or other Nazi crimes against humanity shall be punished with imprisonment for one year up to ten years.

In Austria the anti-Nazi laws are so strict one can go to prison for making the Nazi hand salute or saying "Heil Hitler."

"The future use of the house by the police should send an unmistakable signal that the role of this building as a memorial to the Nazis has been permanently revoked," Austria's IInterior Minister, Wolfgang Peschorn said in a statement.

The house is set to be redesigned following an international architectural competition.

Center for American Progress Action Fund

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via Mike Mozart / Flickr

Chick-fil-A is the third-largest fast food chain in America, behind McDonald's and Starbucks, raking in over $10 billion a year.

But for years, the company has faced boycotts for supporting anti-LGBT charities, including the Salvation Army, the Fellowship of Christian Athletes, and the Paul Anderson Youth Home.

The Salvation Army faced criticism after a leader in the organization implied that gay people "deserve to die" and the company also came under fire after refusing to offer same-sex couples health insurance. But the organization swears it's evolving on such issues.

via Thomas Hawk / Flickr

The Fellowship of Christian Athletes explicitly announced it was anti gay marriage in a recent "Statement of Faith."

God instituted marriage between one man and one woman as the foundation of the family and the basic structure of human society. For this reason, we believe that marriage is exclusively the union of one man and one woman.

The Paul Anderson Youth Home teaches boys that homosexuality is wrong and that same-sex marriage is "rage against Jesus Christ and His values."

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In 2012, Chick-fil-A's CEO, Dan Cathy, made anti same-sex marriage comments on a radio broadcast:

I think we are inviting God's judgment on our nation when we shake our fist at Him and say, "We know better than you as to what constitutes a marriage". I pray God's mercy on our generation that has such a prideful, arrogant attitude to think that we have the audacity to define what marriage is about.

But the chicken giant has now decided to change it's says its charitable donation strategy because it's bad for business...Not because being homophobic is wrong.

The company recently lost several bids to provide concessions in U.S. airports. A pop-up shop in England was told it would not be renewed after eight days following LGBTQ protests.

Chick-fil-A also has plans to expand to Boston, Massachusetts where its mayor, Thomas Menino, pledged to ban the restaurant from the city.

via Wikimedia Commons

"There's no question we know that, as we go into new markets, we need to be clear about who we are," Chick-fil-A President and Chief Operating Officer Tim Tassopoulos told Bisnow. "There are lots of articles and newscasts about Chick-fil-A, and we thought we needed to be clear about our message."

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Instead, the Chick-fil-A Foundation plans to give $9 million to organizations that support education and fight homelessness. Which is commendable regardless of the company's troubled past.

"If Chick-Fil-A is serious about their pledge to stop holding hands with divisive anti-LGBTQ activists, then further transparency is needed regarding their deep ties to organizations like Focus on the Family, which exist purely to harm LGBTQ people and families," Drew Anderson, GLAAD's director of campaigns and rapid response, said in a statement.

Chick-fil-A's decision to back down from contributing to anti-LGBT charities shows the power that people have to fight back against companies by hitting them where it really hurts — the pocket book.

The question remains: If you previously avoided Chick-fil-A because it supported anti-LGBT organizations, is it now OK to eat there? Especially when Popeye's chicken sandwich is so good people will kill for it?

via Gage Skidmore / Flickr and nrkbeta / flickr

The Southern Poverty Law Center (SPLC) dropped a bombshell on Tuesday, announcing it had over 900 emails that White House aide Stephen Miller sent to former Breitbart writer and editor Katie McHugh.

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