Yunus is well respected for his creative approach to poverty eradication. But the rude reality is that he violated the labor law of Bangladesh.
by Arun Kumar Goswami
How well are social media users aware of Dr. Yunus’ dark side? The question is important because social media is an integral part of today’s world, and Dr. Yunus is a widely discussed personality worldwide. Social media enables users to connect and share ideas, concepts, and perspectives with others in a secure environment. One of the methods of shaping public opinion nowadays is through the activism of social media users. Keeping in mind the importance of social media, we can examine the dark side of the much-talked-about Nobel Laureate Dr. Yunus!
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| Beautiful rural life, Padmabil, Khulna, Bangladesh [ Photo Credit: ] |
Nobel Laureate Dr. Muhammad Yunus was once widely praised, both domestically and internationally, for his pioneering work to “end poverty” through microfinance. However, his image suffered a dramatic blow when his fraudulent activities in tax evasion, money laundering, labor law violations, exploiting marginalized people, influencing the World Bank to revoke funding for the Padma Bridge, and abusing power to shield financial misdeeds were exposed. Instead of immediately addressing the grave allegations against him, Dr. Yunus filed several cases and writ petitions with various courts to silence these matters. He tried to divert public attention away from his ethical and legal issues by undermining domestic authorities and seeking foreign support to portray himself as a political victim. Professor Yunus evoked sympathy and swayed social media opinion in Bangladesh and beyond using this tactic. However, a deeper investigation reveals that a large majority of netizens are unaware of his serial episodes of financial irregularities, blatant disregard for rules, shady business practices, and misuse of funds.
Many people think that Grameen Bank is a private institution more akin to an NGO, which is incorrect. Grameen Bank is owned by the government of Bangladesh. Article 152 of the Constitution of Bangladesh clearly states that all bodies, organizations, or companies whose functions or main functions are governed by any special law, statute, or ordinance made by the state are state statutory bodies. Grameen Bank was established by an ordinance during the Ershad government; it is definitely a state organization, not a private company or NGO. In 1983, the then government issued Ordinance-46 to initiate Grameen Bank with a modest capital of TK 3 million. The government provided the majority of this capital (1.8 crore), with the borrowers contributing the remaining TK1.2 crore. Grameen Bank received no investment from Dr. Yunus. However, he used Grameen Bank funds to establish 28 entities under his authority, all of which are legally associated with Grameen Bank. Therefore, claiming that the government has taken control of Prof. Yunus’s private companies is absurd, false, and illegal.
Grameen Bank has received contributions and loans from foreign organizations like IFAD, NORAD, SIDA, CIDA, USAID, and the Ford Foundation to provide credit to landless rural populations. However, it is observed that Yunus began establishing a number of for-profit businesses with these funds. The incidents of diverting poverty reduction funding suggest that international contributions for marginalized groups were exploited for personal benefit. This has seriously harmed Grameen Bank’s reputation and raised doubts about the institution’s transparency and accountability.
Questions concerning Professor Yunus and his actions have been raised for a long time, but he has not faced any opposition, either due to his prominence and worldwide influence or the reluctance of the previous government. In 2010, the Norwegian Broadcasting Corporation (NRK) first investigated corruption and financial irregularities against Prof. Yunus and other institutions he founded. In the documentary ‘Caught in Micro Debt,’ Danish journalist Tom Heinemann argues that the concept of ‘Microcredit and Poverty Alleviation’ that Prof. Yunus promotes is, in fact, a hollow slogan. The documentary revealed that Yunus moved about $100 million from the Grameen Bank’s cash granted by European nations to another organization named Grameen Kalyan, which violated the laws. However, after protests from the Norwegian Agency for Development Cooperation (NORAD) and the Embassy of Norway, Yunus returned some funds to Grameen Bank.
In 1997, Dr. Muhammad Yunus was granted permission to establish Grameen Telecom, promising to change the fate of the poor people of Bangladesh by providing telecommunications services and not for any profit. There is no share capital and no individual ownership in the business established under Section 28 of the Companies Act. Dividend transfers to any person or entity are illegal under the law. However, approximately 42.6% of the revenues were moved from Grameenphone to Grameen Kalyan in contravention of sections 28 and 29 of the Companies Act of 1994, despite the fact that Grameen Kalyan is not a shareholder in Grameenphone. Being oblivious to his commitment, public welfare, and national interests, Prof. Yunus gave away large corporate shares of the company to a foreign firm.
No surprise, Prof. Yunus is regarded as having a great personality, but the truth is that he chooses not to pay taxes under his country’s system, which is absurd. Those who are blindly passionate about him should be aware that he has participated in massive tax evasion over the years via his own enterprises and personal income tax. Yunus attempted to avoid paying a large amount of money by ‘donating’ TK 760 million to three of his non-profit trusts, known as Yunus Trust, Yunus Family Trust, and Yunus Centre Trust. The National Bureau of Revenue (NBR) investigated the case and requested TK 160 million in compliance with the Gift Tax Law. Later, Prof. Yunus challenged the legitimacy of the NBR’s notification, filing a petition with the Tax Appellate Tribunal. He eventually lost a lengthy legal struggle and was forced to pay TK12.28 crore in accordance with the court judgment. Grameen Telecom, Dr. Yunus’ single business entity, is estimated to have dodged almost Tk 1,000 crore in tax throughout its 26-year history.
Out of the 28 institutions established through ‘Grameen Kalyan’ and ‘Grameen Fund,’ all but Grameen Telecom are loss-making. Grameen Telecom owns 34.2 percent shares of the country’s largest mobile network, ‘Grameen Phone,’ and earns more than 1000 crores of net profit every year. With this money, Professor Yunus has formed shell companies, which are accused of money laundering abroad. An inquiry is proceeding into Grameen Telecom’s alleged money laundering of around TK 300 billion.
Yunus is well respected for his creative approach to poverty eradication. But the rude reality is that he violated the labor law of Bangladesh. His workers were the first to report his illicit activity, while the government and other organizations were oblivious to it. Labor law violations include failing to make laborers and employees permanent after completing their apprenticeships (in violation of Section 4(7) of the Bangladesh Labor Act), failing to pay 5% of profits to labor welfare under the Labor Welfare Foundation Act of 2006, and failing to establish labor welfare and workers’ participation funds. As a result, on January 1, the Dhaka Labor Court convicted Yunus and three other high-profile Grameen Telecom management officials of violating labor laws and sentenced them to six months’ simple jail.
Grameen Bank initially received accolades for its unique strategy of giving microcredit to disadvantaged people, notably women. Yunus received considerable worldwide recognition for this technique and was awarded the Nobel Peace Prize in 2006. However, the sad reality is that millions of impoverished Bangladeshis are suffering as a result of being ensnared in the debt trap of many Yunus-controlled microfinance companies. Despite Grameen Bank’s 41-year history of microcredit implementation, there is no conclusive evidence of its effectiveness in lifting impoverished people out of poverty; instead, there have been numerous reports of victims of this terrible debt cycle attempting suicide due to their inability to repay their loans.
People across the world should understand that by advertising poverty alleviation, Yunus developed a network of the world’s most powerful people to shield his financial wrongdoing. While his concept of poverty reduction is largely accepted, his attempts to gain legal immunity from unethical financial activities by leveraging his Nobel prestige and international influence are grounds for concern. The Yunus case serves as a powerful reminder that accountability, transparency, and justice must triumph over individual legacies and organizational ties. It emphasizes the idea that no one can evade the law, no matter how powerful they are. Indeed, law and justice are equal for everyone, and this is also true in Bangladesh. Dr. Muhammad Yunus is no exception.
Views are personal
Dr. Arun Kumar Goswami, former Chairman of Political Science and Director of the South Asian Study Circle at Jagannath University, Dhaka
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