Bangladesh probes allegations against Grameen bank
Bangladesh began on Wednesday investigating allegations that Nobel Prize winning microlender Grameen bank had illegally diverted aid funds after a Norwegian television documentary cast doubts about its tax records.
January 12, 2011 / 21:25 IST
Bangladesh began on Wednesday investigating allegations that Nobel Prize winning microlender Grameen bank had illegally diverted aid funds after a Norwegian television documentary cast doubts about its tax records.
Last year's documentary said Grameen, led by Nobel Peace Prize winner Muhammad Yunus, had for tax purposes shifted funds provided by Norway's aid agency in the 1990s from one legal entity to another.The government appointed on Wednesday a committee to handle the investigation, officials said, and it will start work immediately. Newspapers said it had three months to submit a final report."The investigation is not to malign any individual or agency but to clarify the confusion and dig out the truth," a senior Finance Ministry official said. The committee is headed by Dhaka University economics professor, AKM Monowaruddin AhmedThe documentary has generated criticism in Bangladesh and abroad of Yunus, whose bank has provided some USD 10 bn in small loans to individuals, mainly women, to fund businesses and help them escape poverty.Last week, Prime Minister Sheikh Hasina accused Yunus of resorting to a "trick" to avoid paying taxes. Yunus has said he would welcome an investigation into the allegations to "bring the truth to the citizens of Bangladesh as soon as possible".The government has no intention of suspending the bank's operations or taking control of it, Finance Minister Abul Maal Abdul Mhith said last week.The allegations come at a time when microlending faces political hostility in several developing countries including India where politicians have accused the bankers of profiteering from the poor.Yunus, dubbed "banker to the poor", was awarded the 2006 Nobel Peace for providing the programme of small loans which has led to the creation of similar programmes in other developing countries.He is lionised by many who secured loans, some intended to provide a measure of equality for destitute women in a male-dominated Muslim society.Jannat-E-Quanine, a spokeswomen for the Grameen Bank told Reuters the bank welcomed the government decision which would clear up the mater.Later, she said in a statement: "Grameen Bank has not received any communication from the government and Grameen Bank is not informed about the Terms of References (TOR) of the newly formed review committee." Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
