Yunus lawyers find Bangladesh Bank order arbitrary

Published, New Age, 7 March 2011 (original link not working)

Yunus lawyers find BB order arbitrary 

David Bergman and M Moneruzzaman 

Nobel laureate Muhammed Yunus’s lawyers on Sunday argued that Bangladesh Bank’s order to remove their client from his position as managing director of Grameen Bank was ‘absolutely arbitrary’ and ‘mala-fide’.
In two and half hours of tightly argued legal argument, Mahmudul Islam, a former attorney general, and Rokanuddin Mahmud, argued that Bangladesh Bank had operated beyond its legal authority in ordering Yunus’s dismissal from Grameen Bank on March 2 2011.
There were moments of rhetorical flourish when Rokanuddin made parallels between Muhammed Yunus and Nelson Mandela, whose epic struggle had brought apartheid in South Africa to an end, and emphasised how Yunus was the originator of Grameen Bank. ‘It was his concept, which he has implemented over thirty years’
In response, to this, Justice Gobinda Chandra Tagore said that ‘It is undoubted that Yunus has brought honour to the country by the bank, but we have to look into the matter whether his position was covered by law.’
Justice Momtazuddin Ahmed was also sitting in court.
The Attorney General, Mahbubey Alam, did not argue in court on Sunday but will have an opportunity on Monday to respond to the petitioner’s arguments.
Last week, the Bangladesh Bank wrote to the chairman of the Grameen Bank informing him that Muhammed Yunus ‘has been relieved of the responsibilities of managing director of Grameen Bank.’
In a crowded and noisy court room, with the lawyers struggling to make themselves heard, Mahmudul Islam argued that the Grameen Bank Ordinance 1993 gave Bangladesh Bank only a very limited role in relation to the post of managing director.
He pointed to section 14 of the ordinance and argued that Bangladesh Bank’s only role was to decide whether to give its approval to a decision already made by the Board to appoint a particular managing director.
‘Bangladesh Bank has no right to terminate,’ he said. ‘The law does not give the Bangladesh Bank the power to terminate the position of managing director.’
He also argued that the Bangladesh Bank was legally prevented from issuing the termination order since the bank had not passed the order in the eleven years after it had became aware of the Board resolution in 1999 which allowed the managing director to remain appointed past his sixty years of age.
‘The Bangladesh Bank had a duty to object. It failed to object. It can’t now object. This is what is called estoppel,’ he told the court.
‘Under the circumstances [of failing to object], one has to assume that it approved. The managing director is continuing [in his position] with the implied approval of Bangladesh Bank and the government.’
‘The Bangladesh Bank owes the court an explanation of what prompted it now to wake up and say it had not given its approval,’ Mahmudul added.
However, the Justice Tagore replied that, ‘If a man is robbed whilst he is sleeping, is it not still theft when he wakes up?’
In the afternoon, Rokanuddin Mahmud added to these arguments by saying that section 45 of the Banking Companies Act 1991 did not give the Bangladesh Bank the authority to fire Muhammed Yunus as the Attorney General had argued on Thursday.
‘There is nothing in the contents of the [Bangladesh Bank order firing Yunus] that says that the order is made through the power under section 45.’
Rokanuddin further emphasised the limited powers of the Bangladesh Bank. ‘Does it have a power to appoint the managing director. No. Does it have the power to remove [him]. No. Does it have the power to relieve him of his duties. No,’ he said.
‘Bangladesh only has one power. To approve the decision made by the board to appoint someone as managing director’.
He said that not only did Bangladesh Bank give its implied approval to allowing Yunus to remain in office beyond the age of sixty.
‘It was not just implied approval, but it was in express terms, by conduct’
Rokunuddin also criticized a point made by the attorney general on Thursday where he argued that there was no ‘universal age of retirement’.
‘There may be a universal principle of retirement, but not of age of retirement.’
He pointed that in Bangladesh there were different rules for different professions.
‘Judges have to retire at 67. Managers of private banks at 65. And bureaucrats at the age of 57.’
Yunus’s lawyer further argued that there was an important distinction between the appointment of a person and the terms and conditions of that appointment.
In the context of the case relating to Grameen Bank’s managing director, Rokanuddin said that whilst the Bangladesh Bank had a role in approving his appointment, it did not have a role in approving the terms and conditions – including the retirement age – under which he was employed.