A Twist in Grameen Bank Founder’s Ouster: Not Fired After All?

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The case of Muhammad Yunus, the Nobel Prize-winning founder of the Grameen Bank, gets curiouser and curiouser. Earlier today, Grameen announced that Bangladesh’s Central Bank had fired Yunus, apparently because he had stayed on beyond the legal retirement age.That was a surprise in itself. Monday’s board meeting, which was billed as a showdown in which Yunus’ critics on the board would finally try to push him out, ended inconclusively. The Grameen Board issued a bland non-statement statement:

The 92nd Board of Directors Meeting of Grameen Bank took place in the Grameen Bank Bhaban on 28 February 2011, in the usual manner. The meeting took place according to the the set agenda. After several items in the agenda were covered, the meeting was adjourned in the normal way.

That wasn’t entirely surprising. Yunus has been holding his ground, insisting that he had done nothing wrong and that when he left, it would happen in an orderly and dignified transition, according to this story from AFP:

“When the time comes, any transition will essentially require a friendly environment and support from the inside and outside stakeholders of the bank to ensure that we continue to be totally committed to our mission for and with the poor.”

Today, the Central Bank, which owns a 25% stake in Grameen, apparently found cause to fire him, triggering headlines around the world. And then, suddenly, he wasn’t fired. The Grameen Board has just sent an equally cryptic statement backtracking:

The Chairman of Grameen Bank has told the press today that the Central Bank has removed Professor Muhammad Yunus as Managing Director of Grameen Bank. This is a legal issue. The Hon’ble Finance Minister has himself stated yesterday that it is a legal issue. Grameen Bank is taking legal advice. It is also examining all the legal aspects of this issue. Grameen Bank has been duly complying with all applicable laws. It has also complied with the law in respect of appointment of the Managing Director. According to the Bank’s Legal Advisors, the founder of Grameen Bank, Nobel Laureate Professor Muhammad Yunus, is accordingly continuing in his office.

This reversal is a sign that he has found enough political support in Bangladesh to hang on for some time longer. The situation is still murky, but I think the key headline today is a local one, from the Daily Star in Dhaka:

The ruling Awami League and the main opposition BNP on Wednesday expressed opposite reactions as Prof Muhammad Yunus was removed from the post of managing director of Grameen Bank.

Yunus has long maintained that the criticism directed at him is driven by politics. It looks like his survival as head of Grameen will depend upon politics as well.