Bangladesh Nobel winner begins legal fight over removal

Reuters News
Posted: Mar 18, 2011 3:54 PM
Bangladesh Nobel winner begins legal fight over removal

By Serajul Islam Quadir

DHAKA (Reuters) - Bangladeshi Nobel laureate Muhammad Yunus launched a legal battle on Thursday against his removal from the top post of the microlending bank he founded, a dismissal seen as part of a vendetta with the prime minister.

The finance minister said Bangladeshis were proud of Yunus's record as a lender to the poor but that illegal actions -- a reference to Yunus staying on as managing director of Grameen bank past the legal retirement age -- could not be allowed.

Yunus took legal action, filing a writ petition to the high court challenging his removal, a day after the central bank ordered him out on the grounds that he had overstayed as head of operations in violation of the law.

After a brief hearing, the High Court said it would issue a verdict on Sunday.

Yunus's chief attorney, Kamal Hossain, told the court that the government had removed the Grameen Bank founder from his post without providing valid reasons.

Nine directors of the Grameen Bank filed a second writ petition challenging the legality of Yunus's removal.

The government-appointed chairman of the Grameen Bank, who on Wednesday made public the dismissal order, told Reuters on Thursday: "Now this is a battle between the central bank and Dr.Yunus and we have to wait until the verdict of the court."

The United States called for the dispute to be resolved "amicably" after the central bank's removal of Yunus.

Action against Yunus coincides with increasing criticism of microlending in several developing countries, including neighboring India, with many officials accusing bankers of profiteering from the poor.

Yunus, 70, set up Grameen, which means village in Bengali, and had been its managing director since 2000. Lauded abroad by politicians and financiers, he has been under attack from Prime Minister Sheikh Hasina's government since late last year, after a Norwegian documentary alleged the bank was dodging taxes.

Yunus has denied any financial irregularities. His supporters say he is being discredited by the government because of a feud with Hasina dating back to 2007, when he tried for a time to set up a political party while Bangladesh was ruled by an interim military government.

Finance Minister Abul Maal Abdul Muhith told reporters after meeting the U.S. ambassador and other Western envoys: "We are proud of him ... and for that we did not pursue the issue."

"But it is also true that an illegal matter cannot go on for an indefinite time. Since last year I had been persuading him to step down but he disagreed."

There was "nothing personal or political," he said, in Yunus's removal and the government had "long been trying to protect his reputation."

U.S. Ambassador James F. Moriarty, addressing the same briefing, said the matter could be solved amicably.

"We are surprised to see the way the government handled a decade-old issue so hastily. We believe still there is a way to settle it in an honorable manner as he is one of the greatest Bangladeshis. But we will not play any role in this issue."

A U.S. embassy statement said Secretary of State Hillary Clinton looked forward to discussing this and other issues in a scheduled meeting with Yunus in Washington next week.


The official retirement age of managing directors at commercial banks is 60. Yunus has said the bank's board, mainly made up of borrowers, allows him to stay on as long as he is able to perform his duties.

Dubbed "banker to the poor," Yunus won the Nobel Peace Prize in 2006 because of his work in helping the poor with loans --sometimes no more than a few dozen dollars -- to set up businesses and make a living.

But analysts and civil society officials say Hasina remained angry over his attempt to form a political party before the 2008 parliamentary elections.

Other officials, including Muhith, have criticized Yunus for making numerous trips abroad without seeking the permission of the government, which holds a 25 percent share in the bank.

Though Yunus was unlikely to pose a threat to Hasina, the party could well have challenged the prime minister's party as he was extremely popular among poor voters.

Hasina has denounced Yunus as a "bloodsucker of the poor" and criticized Grameen Bank's microlending practices. Criticism mounted after the Norwegian television documentary alleged that the bank had, for tax purposes, shifted funds from Norway's aid agency in the 1990s from one legal entity to another.

The documentary sparked criticism in Bangladesh and abroad of Yunus, whose bank has distributed about $10 billion in loans to help Bangladeshis, many of them women, to escape poverty.

(Additional reporting by Ruma Paul; Writing by Anis Ahmed; Editing by Ron Popeski)