GB refutes Yunus Center's arguments over complaints against Yunus

Grameen Bank in a statement refuted Yunus Center's arguments over complaints against Muhammad Yunus, saying the center's response to the bank's complaints in the rejoinder is full of misinterpretation of the law and contradictions.

Earlier, Grameen Bank authorities accused Muhammad Yunus and his associates of financial irregularities and corruption by submitting evidences and documents in the anti-corruption commission.

Following their complaint, the Yunus Center issued a rejoinder on May 30, protesting the allegations raised by Grameen Bank.

The GB's statement said the Yunus Center protested Grameen Bank's allegations without any specific legal arguments or evidence.

About the PLC loan, Grameen Bank said in the nineties, when Dr. Yunus was the managing director of Grameen Bank, a business company based in Chittagong, Packages Corporation Limited (PCL), was given a loan of about 9.5 crore Bangladeshi Taka, without complying with the rules and regulations of Grameen Bank. Note that Packages Corporation Limited is a business owned by Dr. Yunus and his family.

Yunus Centre's explained that in the bilateral agreement signed between Grameen Bank and Packages Corporation, it is made very clear that the owners of Packages will not take any kind of financial benefits from Grameen Bank, such as 'share of dividend', rent of land, use of buildings and machinery Everything will be given for free.
 
After the signing of the agreement and the transfer of the plant and property of Packages to Grameen Bank, Packages Corporation was no longer under the control of the owners, and there were no further financial transactions with the owners. Any loan received by Packages does not in any way go to the owners of the company.

If it is a loan, it will be an internal financial transaction of the Grameen Bank network. The loan came to Packages Corporation after the Grameen Bank deal, from a social business fund known as SVCF (Social Business Venture Capital Fund), formed with the financial support of donors SVCF was created with donor-funding, to establish and promote social businesses.

About the misinterpretations and misleading information from Yunus Centre, Grameen Bank said according to Yunus Center, Packages Corporation did not receive any financial benefits.

However, according to clause 22 of the agreement they are citing, the net profit earned by PCL (Packages Corporation Limited) was shared equally between the two parties on a 50:50 basis (after deduction of income tax).

During the term of the contract, this profit was not received by PCL as 'profit But this profit was credited to a fund held by PCL, and the fund was owned by PCL as well.

It means that Packages Corporation may not have used the profit immediately, but Packages Corporation kept its portion of the profit separately under its ownership (as its own money) Grameen Bank has not been given any power to supervise (or ensure) how the deposited money (from profit) was spent by PCL. In other words, Grameen Bank did not actually know how PCL. spent their portion of profit.

 Grameen Bank had no opportunity to know how the profits, earned through the illegal and unethical use of Grameen Bank by Professor Yunus, were actually used by Packages Corporation. All the evidence clearly shows; it was because of the management and workorders of Grameen Bank that the ailing and distressed business enterprise, Packages Corporation Limited, owned by Dr. Yunus and his family. survived and profited.

'PCL was given completely to Grameen Bank for free', this information from Yunus Center is also misleading, this information is not correct. The agreement was signed saying that there would be no change in ownership, it was mentioned that Grameen Bank would only take over the management.

The purpose of linking the ailing printing company Packages Corporation, owned by Professor Yunus and his family, with Grameen Bank was to pay the financial debts of Packages to various banks. Immediately after the agreement (on 19- 11-1991), Dr. Yunus illegally approved a loan of 11,50,000 (Eleven Lakh Five Hundred Thousand) from Grameen Bank to pay the debts of Packages Corporation Ltd. to Janata Bank Laldighi Corporate Branch.

They claim that the loan given to Packages Corporation Ltd. is not from Grameen Bank, but from SVCF (Social Venture Capital Fund) formed with the financial help of donor organizations. SVCF is actually Grameen Bank's own fund consisting of foreign aid and loans.

Grants and loans given to Grameen Bank by foreign aid agencies can only be given as loans to rural poor landless persons, as per Grameen Bank Act Dr. Yunus did not have the legal right to lend to a printing press owned by himself, and it was not allowed by the donor- agreement either.

So, Grameen Bank did not have jurisdiction to give this loan. And again and again, it was wrongly called 'Grameen Bank's decision' by Professor Yunus.

But at that time, by abusing the power of the managing director and disregarding the laws, Dr. Yunus used to run Grameen Bank according to his own will, it has become very clear now with all the information of corruption and irregularities of Professor Yunus.

He not only gave loans, but by waiving both the interest and principal part of the loan, he benefited his private company while causing huge financial loss to Grameen Bank. And thereby he broke the trust of Grameen Bank, and defrauded all employees and borrowers of Grameen Bank.

Grameen Bank raised complaints that Yunus and his family took huge financial benefits by providing workorders of 'printing materials of Grameen Bank to family-owned company named 'Packages Corporation Limited (PCL)', Yunus and his family took these illegal and unethical financial benefits by supplying low-quality products at unusually high cost.

Yunus Centre explained that this agreement was valid for 25 years. In these 25 years, Grameen Bank has given a total loan of Tk 9.66 crore to PCL. The owners of Packages Corporation, Professor Yunus and his family, did not receive any financial benefit from the agreement with Grameen Bank.

The objective of the entire bilateral agreement was to reduce Grameen Bank's cost of printing materials, ensure quality printing and timely delivery of printing materials. The owners literally handed over the printing plant to the Grameen Bank for use, without thinking about financial benefit.

About misinterpretations and misleading information from Yunus Center, Grameen Bank said the Yunus Center is cleverly hiding the fact that the much-talked-about contract was signed for 15 years only. The agreement was signed for 15 years, from 1990 to 2005.

However, even after the expiry of the contract period, until Professor Yunus remained as the Managing Director of Grameen Bank, Packages Corporation continued to receive all the printing works of Grameen Bank.

And this continuation remained unbroken as late as 2020 Not only that, Professor Yunus, after 6 years (in 1996), made another company (named Grameen Samogree) the managing agent of Packages Corporation Ltd. And that's how Professor Yunus transferred all the profits of PCL to 2 of his companies.

Dr. Yunus looted crores of Taka from Grameen Bank by fixing the price at a rate of about 30 to 40 percent higher than the market price of that time. A former General Manager of Grameen Bank complained long ago to Professor Yunus regarding these illegal activities through a letter, on January 1, 2000 The former General Manager protested, saying "It will be very uncomfortable and embarrassing for both Grameen Bank and Muhammad Yunus"

Grameen Bank has never received any benefits from Packages Corporation. Rather, Dr. Muhammed Yunus misused his power by providing workorders to Packages Corporation Ltd. at unusually high rate. And that's one of many ways how Professor Yunus looted crores of Taka from Grameen Bank.

For example: Grameen Bank's loan-approval book was printed from PCL in 2008 at a unit cost of BDT 772. BDT 6.05 was spent for printing the same book from another institution in 2021. That is, after 13 years, Grameen Bank has managed to print the same thing by reducing the expenditure by BDT 1.67 per unit.

Around 20 to 25 lakh loan-approval books are printed in Grameen Bank every year. And there were printing materials of many more kinds. And, the evidence shows that very low-quality goods from Packages Corporation used to come to Grameen Bank.

It is to be noted that Dr. Yunus, through abuse of power, broke his own procurement policy. And that is how Professor Yunus has given the task of printings of Grameen Bank, for decades, to this one company (PCL) which is owned only by him and his family.

Grameen Bank used to waste a lot of time and money while distributing goods from an organization (PCL) located in Chittagong to Grameen Bank head office and various other branches.

It was because of the management and workorders of Grameen Bank that the ailing and distressed business enterprise, Packages Corporation Limited, owned by Dr. Yunus and his family, survived and profited. Dr. Yunus benefited illegally by diverting a lot of money from Grameen Bank, and PCL was one of his many tools for these diversions.

Grameen Bank raised complaints that according to the 'Grameen Bank Ordinance 1983', the bank's lending facilities are restricted to landless poor borrowers only. But Mr. Yunus broke the law, and extended the loan to his family-owned company named 'Packages Corporation Limited (PCL)'.

Yunus Centre explained that Professor Yunus did not break any law. Packages Corporation received the loan from a fund called SVCF (Social Venture Capital Fund) which was created with the help of donors. Grameen Bank's pricing committee used to work strictly on pricing. The price fixed by the 'Price Fixing Committee' was always much lower than the market price.

About misinterpretations and misleading information from Yunus Centre, Grameen Bank said Yunus has made unethical and bad changes in Grameen Bank to facilitate and benefit PCL financially, many of which are illegal.

He reconstituted the 'General Purchase Committee' through 'Office Memorandum No. 52/1995' on 28th March (of 1995) for the purpose of giving illegal financial advantage to PCL by influencing the procurement process of Grameen Bank. He also reconstituted the 'Price Fixing Committee' on the same date, through 'Memorandum No. 53/1995', to fix prices based on his wishes.

Therefore, Packages Corporation did not print at less price than the market-price, it is clear from the work orders of printings of that time; Rather, 30 to 40 higher rates were charged during that time.

On the other hand, Packages Corporation was not supposed to get the loan that Packages Corporation got from SVCF (Social Venture Capital Fund). Donors used to give loans to Grameen Bank by specifying the sectors in which the money could be spent. PCL was given this loan illegally, by Professor Yunus.

In 1994, the donors' final evaluation report raised objections to disbursement of loans to Packages Corporation from SIDE funds. Dr. Yunus continued providing the illegal loan to PCL by ignoring the objections of foreign donor organizations because of his tendency to misuse power in very bad ways, and because of his dictatorial nature. But this information has been suppressed by the Yunus Centre in a very clever way.

Grameen Bank raised complaints that when the Packages Corporation defaulted on the loan, Professor Yunus contributed in waiving a significant amount of the loan by abusing his power with a view to benefitting the Yunus-family (including himself). And he caused damage to Grameen Bank financially, in the process.

Yunus Centre explained that the Yunus-family was not involved in the financial affairs of Packages Corporation. The owner has not taken any loan. So, the question of waiver does not arise. Grameen Bank has given a total loan of Tk 9.66 crore during the 25-year term of the agreement. Out of this, the amount of unpaid money being waived is 7 lakh 22 thousand taka. Allegations of the bank of "abusing power to waive 'significant amounts' of money to benefit the Yunus family" are baseless.

About misinterpretations and misleading information from Yunus Centre, Grameen Bank said according to Clause 16 of the agreement "If the 2nd party (Grameen Bank) invests any money in the company during the term of the agreement, it will be considered as a loan of the company (PCL). The company has agreed that the company will pay interest at the prevailing interest rate to the bank/institution (Grameen Bank) from which the loan will be taken."

Therefore, since the ownership of the company has not changed, even if the owners are not in charge of management for 15 years, this loan will be treated as a loan of the company (PCL) as per the agreement. Professor Yunus waived not only the interest but also the principal of the debt of his own company, Packages Corporation, which is totally illegal.

 Grameen Bank owed BDT 96.75 lakhs as principal and BDT 47.88 lakhs as interest (total BDT 144.63 lakhs). The rate of interest was fixed at 16% till 1996, and 12% from 1997 onwards. The interest rate of the whole loan was fixed as 5% in 2005. Then the debt stood at only 7.22 lakh Bangladeshi Taka. A total of BDT 137.41 lakh was waived by reducing interest rate.

 Professor Yunus waived not only the interest but also the principal of PCL's illegal loan, which was unprecedented. It should be noted that; through the waiver of interest, PCL's agreement with Grameen Bank has been disrupted and Grameen Bank has definitely suffered financially. Because, according to the contract, Grameen Bank was supposed to receive interest from PCL at normal or prevailing rate.

Grameen Bank raised complaints that without informing the 'Board of Directors', Mr. Yunus (as the Managing Director of Grameen Bank) entered into a 'Managing Agent' agreement with the Package Corporation Limited, which was against Grameen Bank's benefit.

He also appointed many of Grameen Bank's officers and employees to Packages Corporation, and used Grameen Bank's office free of charge, for the purpose of benefitting PCL and running PCL's activities.

Yunus Centre explained that whatever arrangement Grameen Bank made with Packages Corporation, it was made by Grameen Bank authority. In several board meetings of Grameen Bank, the issues related to the contract were discussed. The Board enthusiastically cooperated in the implementation of the agreement.

It was the busiest period of Grameen Bank's expansion phase. Grameen Bank was proceeding with the program to increase from 500 branches to 1000 branches in a very short period of time. Branches were being established in the remote parts of the country.

The right form, the ledger, arriving at the right time, the right amount, the right book were monumental tasks. Professor Yunus needed skilled colleagues and Grameen Bank provided them. They worked in Grameen Bank's office and PCL's office. They considered the office of packages as their own office.

About misinterpretations and misleading information from Yunus Centre, Grameen Bank said Professor Yunus provided all the works of printings of Grameen Bank (all the workorders) only to PCL (which is owned by him and his family), for decades, without any procurement, by violating rules and laws, in a dictatorial manner.

 In this case, tenders were not invited and 'rules of workorder' was not followed. In the review of 'workorders given to Packages Corporation Limited', it was mentioned that 'workorders have been issued as per the decision of the bank authority'; but in fact, no approval of the 'board of directors' has been received in this case.

Almost all decisions of Grameen Bank used to be taken by Dr. Yunus alone, and those decisions were hardly approved by the 'board of directors' even though many of those required approvals.

Professor Yunus has himself raised few things regarding PCL to get the board's (board of directors) approval with a view to benefitting his family-owned company (PCL), so there is absolutely no chance for Dr. Yunus to avoid responsibility even at the behest of the board.

One of the most important aspects of Grameen Bank's complaint is - although the contract period is 15 years, the appointment of Grameen Bank's officers/employees on deputation to PCL lasted throughout the whole time of Yunus' tenure (many years after the end of the contract).
In this case, as there has been abuse of power, the rights of Grameen Bank's officers/employees have also been undermined. At the same time, Grameen Bank suffered financially, and Dr. Yunus and his family illegally benefited by using Packages Corporation.