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Rediff.com  » Business » Yunus welcomes probe into fund diversion allegation

Yunus welcomes probe into fund diversion allegation

December 06, 2010 15:38 IST
Nobel Laureate Muhammad Yunus has welcomed Prime Minister Sheikh Hasina's call for an investigation into allegations that he channelled foreign aid meant for the Grameen Bank to another company.

"Honourable Prime Minister Sheikh Hasina said the issue on Grameen Bank which was discussed in several newspapers, should be investigated. I welcome such initiative," Yunus said in a brief statement on Sunday, hours after Hasina favoured an extensive enquiry as the allegations by a Norwegian TV documentary aired last week exposed Grameen Bank to a massive controversy.

Yunus, who won the Nobel Prize in 2006 for his efforts in making Grameen Bank as a microfinance organisation and community development bank that provides small loans to the impoverished said, "I am confident that this (investigation) will resolve the matter and bring the truth to the citizens of Bangladesh as soon as possible".

His statement came as Hasina said that Grameen Bank's exposure to the controversy could have occurred as it tried to play a "trick" to evade government taxes by transferring $100 million to a non-profit sister venture of the bank.

"There should certainly be a thorough investigation to find out what actually happened," she told newsmen. Hasina also appeared very critical of the "very high" interest rate the bank charged its poor clients saying their microcredit mechanism did not allow the poor to come out of the poverty cycle as "micro-financers nurse poverty to run their brisk business".

"Many examples are set in Bangladesh. It was an example of wizardry how one could play with (donor provided) people's money," Hasina has said.

Finance minister AMA Muhith earlier, however, apparently came in defense of Yunus as the microfinance organization trashed allegations of fund diversion breaching agreements with donors and violating Bangladesh's financial laws.

"I see no fault in the transfer of the fund, if their (Grameen Bank) claim (of doing so under an understanding with the Norwegian government) is true", Muhith told newsmen on Saturday.

Grameen Bank earlier in a statement alleged the media reports gave the impression that these transactions or transfer were somehow "secretive" but there was nothing secretive about.

"It was a matter of honest disagreement (with the foreign donor)," said the statement on Friday three days after the Norwegian TV aired the documentary sparking a wide sensation.

The nearly 2,000-word statement said the Grameen Bank Board took the decision to transfer the amount to Grameen Kalyan from Grameen Bank with "due deliberation, good faith, and with good intentions to benefit the poor".

"There was no wrong doing in the agreement between Grameen Bank and Grameen Kalyan (to transfer the amount)," it said. It said the dispute was revolved 12 years ago as the Grameen Bank did not want go into battle with the Norwegian aid agency NORAD on this issue and reversed its decision and restored the status quo returning the entire amount.

Anisur Rahman in Dhaka
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