Massive Yunus fraud: Sajeeb

The prime minister’s son has defended the government sacking Grameen Bank managing director Muhammad Yunus over ‘unapproved’ reappointment.

In an email obtained by, Sajeeb A Wazed, who also advises Sheikh Hasina, made available some facts from the government side.

The Bangladesh Bank last week ordered the removal of Yunus as Grameen Bank head, saying that his reappointment did not have its approval and that he has been managing director illegally since 1999.

Yunus has gone to court for his reinstatement.

Sajeeb Wazed sought to dispel the popular perception that Yunus founded Grameen Bank and claims that Hasina has a personal vendetta against the embroiled Nobel Peace Prize winner.

“(In fact) the Government of Bangladesh did. Initially, the government owned 65 percent of Grameen Bank, which was whittled down over the years by Yunus. The government still owns 25 percent of Grameen Bank and retains the right to veto management appointees.”

Sajeeb said last year ‘massive financial improprieties at Grameen Bank under Yunus’ came to the fore through the Norwegian state television.

It uncovered documents revealing nearly US $100 million in donor funds to Grameen Bank were transferred out of Grameen Bank to a private corporation, Grameen Kalyan, set up by Yunus.

“The government of Norway raised this as a major concern and as a compromise $30 million was returned. The remaining approximately $70 million was never returned. All correspondence in this regard was from Yunus himself.”

Sajeeb, who is based in Virginia, US, referred to a copy of the letters from the website and a translation of Norwegian television NRK’s ‘response to the Norwegian government’s recent review of this incident where the Norwegian government cleared Grameen Bank of any wrongdoing.

“Just as international lobbying and media are being used in this recent incident, no doubt Yunus lobbied the Norwegian Government as well. However, their explanation left millions of dollars unaccounted for,” the advisor wrote in the email.

The government was forced to form an independent committee to investigate this major issue, he added.

“Yunus personally gave a press statement (no questions were allowed) where he announced that he undertook these transfers to avoid taxes, which constitutes tax evasion.

“However, this makes no sense since Grameen was at the time a non-profit organisation and paid no taxes. What is clear is that this transfer is completely illegal and constitutes a criminal offence of “conversion” under Bangladesh law,” Sajeeb Wazed asserted.

The email continued: “Further investigation uncovered other fraud, improprieties and illegal activity at Grameen Bank under Yunus. These include:

“Between 1998 and 2002 all microloan borrowers were forced to pay an additional amount labeled “forced savings” which they were supposed to be paid back.

“However, this money was never returned to the borrowers, who are among the poorest of society!

“This is fraud and theft.”

Secondly, the advisor said, donor funds were used to invest in a variety of private sector for profit ventures, all without approval from either the donors or the government, which owns 25 percent of Grameen Bank.

“In several cases, the equity in these private ventures was held not by Grameen Bank, but by Yunus and his family members personally. This is completely illegal and constitutes embezzlement.”

Sajeeb went on: “Loans were made by Grameen Bank to some of these corporations, which is completely illegal since Grameen Bank is not a regular bank. It is lending donor funds and is only allowed to loan to microcredit borrowers.”

“Grameen Bank charges up to 30 percent in interest rate on loans and up to an additional 10 percent in “forced savings” to the poorest sections of society.

The email read, “Their collection methods are draconian and collection officers who fail to collect payment have the uncollected amounts deducted from their pay.

“There are many documented cases which constitute abuse and the criminal offence of “molestation” under Bangladesh law.

“Since the financial improprieties surfaced in the media, some of these victims finally gained the confidence to sue Grameen Bank and Yunus.

Sajeeb pointed out that despite the hype, there is no evidence that microcredit has, in fact, reduced the rolls 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.

“Furthermore, the private sector investments made using Grameen Bank money have become quite profitable.

“Grameen Phone is by far the largest telecommunications operator in Bangladesh with a subscriber base of 28 million, annual revenue of over US $1 billion and profits of several hundred million dollars per year.

“Grameen Bank owns 35 percent equity in Grameen Phone, so why do they have to charge such high interest rates to the poor?”

Sajeeb added in the email “still, given his stature as a Nobel Prize winner, the government of Bangladesh requested that Yunus to step down quietly from the post of managing director of Grameen Bank.

“He refused and has engaged in an international lobbying campaign accusing our government and in particular prime minister Sheikh Hasina of engaging in political retribution.

“Nothing could be further from the truth,” he maintained.

Yunus has no political stature in Bangladesh, according to Sajeeb.

“During the brief military regime from 2007-08, under a state of emergency with all political activities banned and most political leaders behind bars, even with the help of the military he was unable to put together a political party and garner any public support.

“Politically, he is a non-entity in Bangladesh and no threat to any political leader.”

Sajeeb concluded by saying that the government has not filed any cases against Yunus, ‘criminal or otherwise’.

“There is absolutely no punitive action here. Our only goal is to prevent further abuse of microcredit borrowers.”


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