Bangladesh court OKs Yunus' dismissal from bank

[March 08, 2011]  DHAKA, Bangladesh (AP) -- A Bangladeshi court upheld on Tuesday the government's dismissal of Nobel laureate Muhammad Yunus from the microfinance bank he founded to lift many out of poverty.

Yunus can appeal the ruling to the country's highest court, the last legal option he has to stay in the post he has held since Grameen Bank's founding nearly three decades ago. His lawyer, Sara Hossain, said they were still deciding whether to appeal.

Last week, the central bank ordered Yunus, 71, out of Grameen, saying he was violating the country's retirement laws.

At that time, Grameen said Yunus would remain in his post while the bank fights the order. But Attorney General Mahbubey Alam said Tuesday that Yunus must step down during the appeals process.

"We will consult with lawyers before we make our next step," Grameen spokeswoman Jannat-E-Quanine said in a statement Tuesday. "We have received the ruling and we will hope Grameen operations will not be affected in any way."

Dozens of Grameen borrowers and employees stood in a human chain outside the headquarters in Dhaka's northern Mirpur district to express support for Yunus.

An outspoken government critic, Yunus has said the dismissal was illegal and alleged that the government was trying to take control of his bank, which pioneered the practice giving tiny loans to alleviate poverty. His work spurred a boom in such lending across the developing world, earning him and the bank the 2006 Nobel Peace Prize.

He told reporters on Monday that it was important that Grameen remains in the hands of its poor borrowers who make up 75 percent of its shareholders. The government holds the other 25 percent but has installed its own chairman and was looking to replace Yunus so the bank "becomes fully at their disposal," he said.

Yunus has long had frosty relations with Prime Minister Sheikh Hasina.

She was reportedly angered by Yunus' 2007 attempt to form his own political party, backed by the country's powerful army. Hasina has accused Grameen Bank and other microfinance institutions of charging high interest rates and "sucking blood from the poor borrowers."

At the center of the current controversy is whether Yunus is exempt from a law governing Grameen's operations that set the retirement age at 60, in line with other banks in the country. The central bank says its approval was never sought for an exemption allowing Yunus to stay on as managing director for as long as he chooses.

Grameen contends that the central bank implicitly approved the exemption because it did not raise any objection to it in its audits.

In Tuesday's ruling, Judges Mamtazuddin Ahmed and Gobindra Chandra Thakur accepted the central bank's argument.

Yunus was not present at the court when the ruling was delivered and could not immediately be reached for comment.

"My thoughts are for the welfare of borrowers and employees of Grameen Bank," Yunus said in a statement published in Dhaka newspapers Tuesday. "To ensure this there should be a smooth transition of management leadership from me to the next managing director."

Grameen Bank currently has nearly 9 million borrowers in Bangladesh, 97 percent of whom are women. Without needing collateral to borrow, many use their small loans to make ends meet or to start small businesses.

[Associated Press; By FARID HOSSAIN]

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