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Rejoinder to Grameen Bank’s Allegations against Professor Yunus

Rejoinder to Grameen Bank’s Allegations against Professor Yunus

Yunus Centre Press Release (30 May 2024)

 

Allegation

In the nineties, when Dr Yunus was the Managing Director of Grameen Bank, Packages Corporation Limited, a business entity of Dr Yunus and his family located in Chittagong, was given a loan of Tk 9.5 crore without adhering to the rules and regulations of Grameen Bank.

 

Response
 
The owners of Packages Corporation, that is, Professor Muhammad Yunus and his family, had no intention of benefitting financially from the Agreement with Grameen Bank. They simply offered to give their renowned printing press for the use of Grameen Bank without any financial benefits.

 

The bilateral agreement signed between Grameen Bank and Packages Corporation makes it very clear that owners of Packages would not take any kind of financial benefits from Grameen Bank, such as, share of profit, rent on the land, building and machinery, any fee of any kind during the tenure of the management contract with Grameen Bank. The objective of Grameen Bank was to reduce the cost of printing materials of Grameen Bank, ensure quality printing and timely delivery of all printing materials. Owners just literally handed over the printing plant to Grameen Bank free of cost. Grameen Bank could not pass up the offer at a time when the bank was expanding very quickly and was in huge need of a quick supply of quality printing materials. Yunus family’s offer to hand over the printing plant to Grameen Bank totally free of cost and any financial obligations came as a very attractive offer.

 

After the Agreement was signed and the plant and properties of Packages were handed over to Grameen Bank a new phase of Packages Corporation began when it was no longer under any control of the owners, nothing flowed to the owners.  It entered a new phase, where the owners totally distanced themselves from all affairs of the Packages, including financial affairs.

 

Total loan received by Packages over a period of 25 years was less than taka ten crores. These are internal financial transactions within Grameen Bank network of projects and companies. Any loan given to Packages has no way to reach the owners as per the Agreement. It will remain within the Grameen Bank system -- between Grameen Bank and its project, or a social business company designated by Grameen Bank.

 

Any loan given to Packages Corporation does not go to the owners under the Agreement. Loans to Packages came from the Social Business Fund, called SVCF (Social Business Venture Capital Fund), not from Grameen Bank. SVCF was created with donor funding to support and promote social businesses.

 

The allegation  that Yunus family financially benefitted from the loan is totally false.

 
 
Allegation

Yunus and his family took huge financial benefits by giving work orders to the family company to print printing materials worth billions of taka of the bank at high prices.

 

Response
 
The allegation is absolutely false. The owners of Packages Corporation, that is, Professor Yunus and his family, could not benefit financially from Grameen Bank under their Agreement.  Owners were totally removed from any transaction between Packages and Grameen Bank under the Agreement. 

 

The bilateral agreement signed between Grameen Bank and Packages Corporation made it very clear that owners of Packages Corporation would not take any kind of financial benefits from Grameen Bank, such as, share of profit, rent on land, building and machinery, any fee of any kind during the tenure of the Agreement with Grameen Bank.

 

Allegation
 
According to the Grameen Bank Ordinance 1983, loan facilities are limited to landless poor borrowers, but Mr Yunus broke the law and provided loans to his family firm Packages Corporation.

 

Response
 
Professor Yunus did not break any law as alleged above.

 

The Packages Corporation received working capital loans from Grameen Bank through its donor-funded window called SVCF (Social Venture Capital Fund). This loan money cannot reach the owners of the Packages Corporation under the Agreement. And it did not.

 

As per the Agreement between Grameen Bank and Packages Corporation, if the Packages Corporation makes any profit, the owners of Packages Corporation would never receive any share of that profit.

 

Packages Corporation never made any profit because all prices were determined by the Price Fixing Committee of Grameen Bank which always fixed prices very strictly making sure it is always lower than the market price.
 
 
 
Allegation
 
When the Packages Corporation failed to repay the loan, Professor Yunus misused the power and got a significant amount of unpaid money waived by the bank to benefit the Yunus family.

 

Response
 
Owners were not involved with financial matters of Packages Corporation. No loan from Grameen Bank was given to owners or reached owners through Packages. So the question of waiver never arose.

 

The allegations of misusing power to waive a “significant” amount of unpaid money (which happened to be a total of Taka 7,22,000 — seven lakh twenty two thousand) by the bank to benefit Yunus family are totally unfounded.

 

Allegation
 
Without informing the board of directors, Mr Yunus entered into a 'managing agent' agreement with Packages Corporation, which was against the benefit of the bank. He also appointed some officers and employees of the bank to the Packages Corporation and used the Grameen Bank office free of charge for the purpose of conducting the activities of the organization.

 

Response
  
Whatever arrangement Grameen Bank made with Packages Corporation, it was done by the authority of Grameen Bank. Agreement-related issues were discussed in multiple Grameen Bank board meetings. The board was totally behind the Agreement all the time and never questioned the importance of the Agreement.

 

Once Grameen Bank took over the management of this big operation of printing and supplying printing materials to support a massive expansion programme of Grameen Bank from five hundred branches to a thousand branches, branches which were spread out all over the country, printed materials had to be delivered to all branches at the right time, right printing materials must be despatched in the right quantity.  Grameen Bank needed a dedicated team of people running their operation right out of the printing plant's office building in Chittagong and management team in Dhaka in Grameen Bank office. Owners did not charge any money for Grameen Bank employees using their property, because that property was given to them under the Agreement.

 

End

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