© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Last updated: March 9, 2011 10:04 am
Muhammad Yunus, the Nobel laureate and microfinance pioneer, suffered a setback on Tuesday when the Bangladeshi High Court upheld his removal from Grameen Bank, the institution he founded 34 years ago.
The court ruling – which backed a move by the central bank and which Mr Yunus will appeal against – came as the US criticised Bangladesh’s handling of the affair.
On Wednesday his lawyers appealed against the ruling to the Supreme Court’s appellate division, in the latest legal twist in a bitter battle between Mr Yunus and the Bangladeshi government.
“Despite a great many conversations we’ve had with all levels of our government, with our friends in Bangladesh, there’s been a deterioration in the situation,” said Robert Blake, US assistant secretary of state for South Asia.
In an interview, Mr Blake told the Financial Times the US was “troubled” by the attempt to remove Mr Yunus, which it saw as “out of step” with the Bangladeshi government’s behaviour on other fronts, such as poverty reduction.
“We have made it known we support a resolution of the situation to preserve the integrity, independence and the effectiveness of Grameen Bank, but we have not sought to try to prescribe what that solution should be,” he said. “I don’t want to make it sound like we are interfering too much.”
Hillary Clinton, US secretary of state, who has known Mr Yunus for decades, was scheduled to talk to him later in the day by telephone. Mr Blake said Mrs Clinton’s “long and personal relationship” with him did not affect US concerns about the dispute, which were widely shared in the administration and in Congress.
He said the Grameen affair would not overshadow the two countries’ relationship. “This is a country that is doing a lot of things right ... and some of their actions with respect to Grameen Bank are a little bit out of step with that,” he said. “We thought it was important as a friend to point that out.”
On Tuesday, Mr Yunus indicated he would be willing to step aside from Grameen Bank’s day-to-day management – in a “congenial environment” – to end the bitter row over the institution’s future. His lawyers said they would appeal against the ruling to the Supreme Court’s appellate division, possibly as early as Wednesday.
Grameen Bank said it was “very disappointed” with the court’s ruling, and expressed hope that “nothing will jeopardise the stability” of the institution, which has $1.4bn in deposits, and some $955m in outstanding loans to 8.3m borrowers.
Mr Yunus issued an appeal on Monday for a smooth transition of leadership at Grameen, the first public indication that he was willing to relinquish control of the institution.
His supporters released a letter Mr Yunus wrote last year to A.M. Muhit, the finance minister, proposing that he step down as managing director, and suggesting the government – which selects a quarter of the Grameen board’s voting members, and the chairman – appoint him as chairman. “This will ensure the continuity in the bank remains. The staff and borrowers of Grameen Bank will not get scared by the suddenness of my departure,” Mr Yunus wrote.
In its decision, the Bangladesh High Court rejected Mr Yunus’s claim that his sudden sacking last week by Bangladesh Bank, the central bank and financial sector regulator, was arbitrary and illegal.
In their verdict, the judges found Mr Yunus, now 70, had no legal authority to act as the microlender’s managing director, because its board – dominated by representatives of Grameen borrowers – had not obtained the central bank’s sanction to re-appoint Mr Yunus beyond the bank’s official retirement age of 60.
Friends of Grameen, a group of Mr Yunus’s powerful international supporters, slammed the judgment as “politically oriented and without legal grounds”.
Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in