Bangladesh court upholds removal of Yunus as Grameen Bank head

Wednesday, 9 March 2011 00:01 -     - {{hitsCtrl.values.hits}}

(Reuters) - A Bangladeshi court on Tuesday upheld an order removing Nobel Peace Prize winner Muhammad Yunus as head of the microlending bank he founded, a move seen as part of a government vendetta over his political ambitions.

Yunus, 70, had been removed as head of Grameen Bank last week by the central bank at the government's behest on grounds that he had stayed on past the legal retirement age of 60.

The High Court struck down Yunus's petition, saying that his serving as the bank's managing director beyond age 60 was illegal. “Hence he must vacate the post,” the court added.

In 2007, while Bangladesh was ruled by an interim military government, Yunus tried to set up a political party, but later stepped back from the idea, saying it would not sit well with Bangladesh's traditional politics and cycles of unrest.

Though Yunus was unlikely to pose a threat to Prime Minister Sheikh Hasina, his proposed party could well have challenged the prime minister's party because of his popularity among poor voters.

One of Yunus's attorneys, Tanim Hussain Shawon, said: “We have already communicated the decision of the court to Professor Yunus and have yet to receive his opinion. We will then decide whether to appeal (to the Supreme Court).”

On the eve of Tuesday's court ruling, Yunus said his dismissal had been staged by Hasina's government as part of its drive to take over the bank. [ID:nN0794676]

“This is a bank owned by poor women and that's right now under threat because our government somehow feels ... that they would like to take control of the bank,” Yunus said by video link to a panel on microfinance in Washington.

Action against Yunus coincides with increasing criticism of microlending in developing countries, including neighbouring India, with officials accusing bankers of exploiting the poor.

But analysts said the dismissal would annoy the country's friends, including the United States, and could even provoke protests within the country.

Thousands of protesters marched through Dhaka last weekend to denounce Yunus's removal.

Yunus has said he wants to step down from his position but at a time of his choosing to ensure a smooth transition for what he calls an institution “of the people”. Yunus set up Grameen, which means village in Bengali, and had been its managing director since 2000.

Lauded abroad by politicians and financiers, he has been under attack by the government since late last year, after a Norwegian documentary alleged the bank was dodging taxes.

Yunus has denied any financial irregularities.