Skip to main content

Nobel laureate faces fresh trouble over his banking tenure

From Farid Ahmed, for CNN
updated 12:03 AM EDT, Fri August 3, 2012
Nobel Laureate and Founder of Grameen Bank Muhammad Yunus in New York in April.
Nobel Laureate and Founder of Grameen Bank Muhammad Yunus in New York in April.
STORY HIGHLIGHTS
  • Muhammad Yunus won the 2006 Nobel Peace Prize for founding Grameen Bank
  • The bank pioneered microlending to the poor
  • The Bangladeshi government has ordered an inquiry into Yunus' tenure
  • The government forced Yunus out last year because of age limits

Dhaka, Bangladesh (CNN) -- Nobel laureate Muhammad Yunus faced fresh trouble Thursday after the Bangladeshi government ordered an inquiry into irregularities during his tenure as head of his microlending bank.

The Bangladeshi Cabinet, headed by Prime Minister Sheikh Hasina, ordered the Internal Resources Division to ascertain whether Yunus, founder of Grameen Bank, enjoyed tax exemption while he was managing director of the bank, said Cabinet secretary Mohammad Musharraf Hossain Bhuiyan.

Yunus, who is now in his 70s, founded Grameen Bank three decades ago in an effort to alleviate poverty. He was forced out as managing director last year after Bangladesh's central bank, the financial regulatory authority in the South Asian nation, said Yunus had to end his service at age 60 and that holding his position at 70 was illegal.

Yunus unsuccessfully challenged the central bank's decision in court.

Father of microfinance opens banks

As a result of their work, Yunus and Grameen Bank won the Nobel Peace Prize in 2006. He was also awarded the American Presidential Medal of Freedom and a U.S. Congressional Gold Medal.

The Grameen Bank model was replicated in many parts of the world as its work drew increasing attention to microcredit, a then-novel idea of making small loans to poor people who would not qualify for standard bank loans.

The Cabinet on Thursday also approved a draft law reducing the power of Grameen's board and allowing its government-nominated chairman to appoint the bank's managing director.

It also directed the Bangladesh central bank and the Financial Institutions Division to report on how much money Yunus made in salaries and allowances while head of the bank after he turned 60, Bhuiyan said.

Yunus immediately expressed deep shock at the decision.

In a statement, he said he had always worried the government would take over the bank.

"Now my apprehension has started to become a reality. I am so disheartened that I am unable to express my feelings," said Yunus.

During a visit to Dhaka earlier this year, U.S. Secretary of State Hillary Clinton angered the government when she said she hoped the work of Grameen Bank and Yunus would not be undermined by government actions.

Finance Minister A.M.A. Muhith at the time said the government, which owns a 25% stake in Grameen, had not taken any action against the bank and that the bank was performing well without Yunus.

Yunus' supporters say he was under fire for criticizing politicians and trying to form his own political party five years ago during an interim, unelected, military-backed government. That party was later abandoned.

The government, however, denied the claim.

ADVERTISEMENT
Part of complete coverage on
updated 10:26 AM EST, Wed February 6, 2013
Advocates say the exam includes unnecessarily invasive and irrelevant procedures -- like a so-called "two finger" test.
updated 7:09 PM EST, Tue February 5, 2013
Supplies of food, clothing and fuel are running short in Damascus and people are going hungry as the civil war drags on.
updated 1:01 PM EST, Wed February 6, 2013
Supporters of Richard III want a reconstruction of his head to bring a human aspect to a leader portrayed as a murderous villain.
updated 10:48 AM EST, Tue February 5, 2013
Robert Fowler spent 130 days held hostage by the same al Qaeda group that was behind the Algeria massacre. He shares his experience.
updated 12:07 AM EST, Wed February 6, 2013
As "We are the World" plays, a video shows what looks like a nuclear attack on the U.S. Jim Clancy reports on a bizarre video from North Korea.
The relationship is, once again, cold enough to make Obama's much-trumpeted "reset" in Russian-U.S. relations seem thoroughly off the rails.
Ten years on, what do you think the Iraq war has changed in you, and in your country? Send us your thoughts and experiences.
updated 7:15 AM EST, Tue February 5, 2013
Musician Daniela Mercury has sold more than 12 million albums worldwide over a career span of nearly 30 years.
Photojournalist Alison Wright travelled the world to capture its many faces in her latest book, "Face to Face: Portraits of the Human Spirit."
updated 7:06 PM EST, Tue February 5, 2013
Europol claims 380 soccer matches, including top level ones, were fixed - as the scandal widens, CNN's Dan Rivers looks at how it's done.
updated 7:37 AM EST, Wed February 6, 2013
That galaxy far, far away is apparently bigger than first thought. The "Star Wars" franchise will get two spinoff movies, Disney announced.
updated 2:18 AM EST, Fri February 8, 2013
It's an essential part of any trip, an activity we all take part in. Yet almost none of us are any good at it. Souvenir buying is too often an obligatory slog.
ADVERTISEMENT