Published, New Age, 9 March 2011 (original link not working)
PM’s son intervenes in Yunus affair
Grameen Bank brushes aside allegations
In an intervention in the ongoing dispute between the Bangladesh government and the Grameen Bank, the son of Bangladesh’s prime minister, Sajeeb Wajed, has accused the bank of ‘fraud’, ‘theft’, ‘tax evasion’ ‘draconian’ methods of loan recovery, and other criminal offences.
In an email, which New Age has confirmed was distributed to international agencies and people of influence including human rights organizations, state department officials, and his own former class mates at the Harvard Kennedy School of Government, the prime minister’s son Sajeeb Wajed directly accuses Muhammed Yunus and his family of ‘embezzlement.’
In a detailed rebuttal, the Grameen Bank has brushed aside all the allegations, calling them ‘completely false’.’utterly misconceived,’ based on ‘inaccurate facts’ and misleading
The Friends of Yunus claimed on Tuesday that the ‘defamtory’s e-mail is ‘now exposing fully the dynamic behind the attack [on] Grameen Bank and [Professor] Yunus.’
In the e-mail Sajeeb, who lives in the United States, calls himself an ‘Advisor to Sheikh Hasina, Honorable Prime Minister of Bangladesh.
He told New Age on Sunday that ‘I was indeed the source of this e-mail,’ and said his main source of the information was two legal documents that ‘were prepared by our lawyers.’
The two documents were attached to the e-mail, which New Age received earlier this week
Sajeeb went onto tell New Age that, ‘They were vetted by relevant Ministries before being provided to me.’
Sajeeb’s comments against Yunus and Grameen Bank are in direct conflict with a briefing given only last week to diplomats and journalists by AMA Muhith, the finance minister.
‘Grameen Bank is an institution in which the government takes great pride’ Muhith said. ‘And we believe that the hard and dedicated efforts of the Grameen employees and borrowers under the able leadership of Prof Yunus has earned for the institution the place of honour that it occupies not only in Bangladesh but also abroad.’
The e-mail came at a very sensitive time with the government trying to remove Muhammed Yunus from his position as managing director of Grameen Bank, and the High Court on Tuesday upholding Bangladesh Bank’s order of dismissal.
The Bangladesh Bank wrote to the chairman of the Grameen Bank last week informing him that Muhammed Yunus ‘has been relieved of the responsibilities of managing director of Grameen Bank.’
Sajeeb told New Age immediately after the High Court decision on Tuesday, ‘Our High Court has ruled that Yunus was holding on to his post illegally and this vindicates us.’
In the e-mail, the main allegation the prime minister’s son makes against the Grameen Bank refers back to the Norwegian Television documentary that had claimed late last year that millions of dollars had ‘disappeared’ from the bank.
Sajeeb himself rejects the conclusion of Norwegian government’s inquiry which cleared the Grameen Bank of any misuse of funds, and instead claims that ‘approximately ‘$70 million’ of donor money ‘transferred out of Grameen Bank’ was ‘never returned’.
He comments that the ‘explanation’ given by the Norwegian government following its investigation ‘left millions of dollars unaccounted for.’
In a statement to New Age, the Grameen Bank said that in 2003 ‘not only NORAD’s remaining money but 100% of all donors money to the extent of Taka 3,474,501 million
was “transferred back … to Grameen Bank.’
New Age has seen the financial accounts relating to the year 2003 that note this ‘transfer’ of money.
The Grameen Bank also says that throughout this period the money had ‘always’ remained in the bank account of Grameen Bank, since the transfer of money was only
Sajeeb also alleges that the Grameen Bank committed ‘fraud and theft’ as it ‘never returned’ to the borrowers ‘forced savings’ that Sajeeb claims microloan borrowers were
required to pay to the bank between 1998 and 2002
In subsequent correspondence with New Age, Sajeeb said, ‘This money was supposed to be put into a separate escrow account and paid back to the borrowers after a certain period. During that timeframe this money was not put into a separate escrow account and
was never paid back.’
In its statement, the Grameen Bank says that the claim is ‘completely false.’
'The truth is, from the beginning of Grameen Bank’s operation, members have been required to maintain a savings account containing 5% of their loan disbursement amount in order to provide for their emergency needs,’ the Grameen Bank says.‘This money is credited to the borrowers savings account, which is an interest bearing account and Grameen Bank has been giving 8.5% interest for the savings.’The Grameen Bank goes onto say that, ‘The borrowers are enjoying the benefit of their savings at their convenience and are allowed to withdraw the entire savings without leaving any balance in their accounts. There is no question of not returning the money to the account
In a direct allegation against Yunus himself, the prime minister’s son also claims that the ‘equity’ in a number of private ventures which used donor funds were held ‘not by Grameen Bank, but by Yunus and his family members personally.’ He goes onto state that ‘This is completely illegal and constitutes embezzlement.’
Sajeeb told New Age directly that, ‘It is my understanding this includes the investment in Grameen Phone as well.’
In response, the Grameen Bank said that, ‘There had never been any single incident of using Grameen Bank fund for private venture with or without approval of the Grameen Bank. More importantly, none of the investments in various companies are held by Professor Yunus and his family members personally.’‘Many times in the past, we have made it very clear that Professor Muhammad Yunus does not own any share in any
company,’ the statement continues.
Sajeeb’s e-mail is also highly critical of microcredit. ‘Despite the hype’, the prime minister’s son says, ‘there is no evidence that microcredit has in fact reduced the rolls (sic) of the poor in Bangladesh.’
'Grameen Bank has been in the microcredit business for 30 years, yet Bangladesh remains one of the poorest countries in the world,’ he says.
He goes onto say that, ‘Grameen Bank charges up to 30% in interest rate on loans and up to an additional 10% in “forced savings” to the poorest sections of society.’
Again the Grameen Bank rejects this.
It points to a recent independent analysis of Grameen Bank’s interest rates by an international organisation called MicroFinance Transparency which it says found that Grameen Bank ‘charges 20% Effective Annual Rate (EAR) for its income generating loans, 8% EAR for house building loans, 5% for education loans (payable after completion of the education) and 0% for the loans granted to the struggling members.’
The statement adds that ‘Grameen Bank charges the lowest interest rate in Bangladesh for microcredit.’
The responsibility to eliminate poverty is not the responsibility of Grameen Bank alone.’
Sajeeb asks in his e-mail why Grameen Bank needs to charge ‘such high interest rates to the poor’ when it owns 35% equity in Grameen Phone which has annual revenue of over US $1 billion and profits of several hundred million dollars per year.
In response to this, Grameen Bank says that, ‘it does not in any way own any part of Grameenphone. Grameen Telecom is the company that owns 33% of Grameenphone.’
Grameen Telecom’s website states that the company’s goal, ‘Is to connect rural Bangladesh through the provision of mobile telephone service by creating micro-enterprises that can both generate individual income and provide whole villages with connectivity.’
In relation to the government’s motivation behind its action against Muhammed Yunus, Sajeeb in his email denies that it has anything to do with ‘political retribution’.
‘Nothing could be further from the truth,’ he states. ‘Politically [Yunus] is a non-entity in Bangladesh and no threat to any political leader.’
He told New Age that, ‘My purpose is simply to bring the facts to light and counter the PR campaign being conducted against the Government.’