'Grameen could collapse over Yunus sacking'
The sacking of Bangladesh's Nobel prize winner Muhammad Yunus from the Grameen Bank he founded could cause the microfinance institution to collapse, his lawyers told the country's Supreme Court on Tuesday.world Updated: Mar 15, 2011 12:46 IST
The sacking of Bangladesh's Nobel prize winner Muhammad Yunus from the Grameen Bank he founded could cause the microfinance institution to collapse, his lawyers told the country's Supreme Court on Tuesday.
Yunus, who created the concept of tackling poverty by offering small cash credits to villagers, was fired as Grameen's managing director on March 2 by an order from the Bangladeshi central bank.
He has fallen out with Prime Minister Sheikh Hasina, and his supporters say he has been targeted in a bitter smear campaign.
At an appeal against the order to the Supreme Court, which later adjourned the hearing, Kamal Hossain, one of Yunus's lawyers, said: "Grameen Bank has been exposed to destruction.
"This kind of action is reminiscent of a command economy. This situation has created uncertainty at Grameen Bank, it is a special institution and we do not want uncertainty there."
Grameen, which Yunus set up in 1983, now provides loans to eight million borrowers, the vast majority of them women living in rural areas.
Yunus, 70, who attended the Supreme Court hearing, declined comment. The court will reconvene in two weeks, Hossain said.
The central bank -- which is nominally independent from the government -- removed Yunus on the grounds that he had been in his position illegally, as he failed to seek its approval when he was reappointed indefinitely in 1999.
The High Court rejected Yunus's first appeal last week, ruling that the central bank's order was legal, and that Yunus had also exceeded Grameen Bank's mandatory retirement age of 60.
Backed by an international lobby group, Yunus defied the sacking order by returning to work at Grameen Bank's headquarters in Dhaka and launching his legal battle to keep control of the organisation.
Yunus has said he would be happy to step aside if a "graceful solution" could be found for his exit.
One Grameen official who asked not to be named said that his removal had already caused increased withdrawals from the bank.
Analysts say Yunus's troubles stem from 2007 when he floated the idea of forming a political party, earning the wrath of Prime Minister Hasina who has publicly criticised his work.
Grameen's huge influence in Bangladesh and its move into solar panels, mobile phones and other consumer goods also appear to have triggered the government's animosity.
"They want to put their own person at the chair of the bank, a political person," Yunus, who won the Nobel peace prize in 2006, told a Washington microfinance conference via video link last week.
Friends of Grameen, a lobby group chaired by former Irish president Mary Robinson, described the High Court's verdict as "politically oriented and without legal grounds".
Yunus's sacking sparked protests with 500 people demonstrating outside the Grameen Bank headquarters on Tuesday and widespread condemnation from overseas, including from US Senator John Kerry.
Developing nations around the world have copied the microfinance model devised by Grameen Bank, which is 25% state-owned and employs 24,000 people.