x Abu Dhabi, UAEWednesday 26 July 2017

Microfinancing pioneer Muhammed Yunus makes final Grameen sacking appeal

Founder of Grameen Bank goes to Bangladesh Supreme Court to overturn central bank's decision to remove him as managing director of microfinance institution.

Muhammed Yunus, centre, emerges from the High Court in Dhaka, where he has been fighting the decision to remove him from his post in the Grameen Bank.
Muhammed Yunus, centre, emerges from the High Court in Dhaka, where he has been fighting the decision to remove him from his post in the Grameen Bank.

DHAKA // Muhammad Yunus, the Bangladeshi pioneer of "microfinance" loans to help the poor, made a final legal appeal to the Supreme Court yesterday against an order dismissing him from his own bank.

The Nobel laureate also asked the court to immediately suspend the central bank's order removing him from Grameen Bank, which he founded in 1983 and which provides collateral-free loans to eight million rural borrowers.

Mr Yunus, 70, celebrated worldwide for tackling poverty through microfinance cash loans, has fallen out with Prime Minister Sheikh Hasina, and his supporters say he has been targeted in a bitter smear campaign.

He was fired as Grameen Bank's managing director last week by the central bank and on Tuesday lost a High Court appeal against his dismissal.

Backed by a high-profile international lobby group, he defied the order by returning to work at Grameen Bank's headquarters and launching his legal battle.

"A hearing has been set for the morning of March 15 and the full bench of the Supreme Court's appellate division, led by the country's chief justice, will hear the case," Tanim Hussain Shawon, one of Yunus's lawyers, said.

During a preliminary hearing yesterday, the Supreme Court refused to suspend the high court verdict, which upheld the central bank order sacking Yunus from his position.

The central bank - which is nominally independent from the government - removed Mr Yunus on the grounds that he had been in his position illegally, as he failed to seek its approval when he was reappointed indefinitely in 1999.

The High Court judge Muhammed Mamtaj Uddin Ahmed said in his ruling on Tuesday it was "crystal clear" that the central bank's order was legal, and added that Mr Yunus had also exceeded Grameen Bank's mandatory retirement age of 60.

Muzammel Huq, Grameen Bank's government-appointed chairman, said: "Following the High Court verdict, Mr Yunus is no longer the managing director of Grameen Bank.

Mr Huq, who is openly hostile to Mr Yunus, said: "Next week, the board will meet and we will set up a five-member search committee to find a new managing director for the bank,"

Analysts say Mr Yunus's troubles stem from 2007 when he floated the idea of forming a political party, earning the wrath of Mr Hasina, who has publicly disparaged his work.

Grameen's huge influence in Bangladesh and its move into solar panels, mobile phones and other consumer goods also appear to have triggered the government's animosity.

Mr Yunus, who won the Nobel peace prize in 2006, told a Washington microfinance conference via video link on Monday: "They want to put their own person at the chair of the bank, a political person."

Friends of Grameen, a lobby group chaired by the former Irish president Mary Robinson, described the High Court verdict as "politically oriented and without legal grounds".

Mr Yunus's sacking sparked street protests in Bangladesh, with 500 people protesting outside the Grameen Bank headquarters on Tuesday and widespread condemnation from overseas, including from US Senator John Kerry.

Grameen Bank, which is 25 per cent state-owned and employs 24,000 people, provides credit to eight million borrowers, the vast majority of them women living in rural villages.

Its work has been copied in developing countries around the world.