Grameen Bank Employed to Run Packaging Firm!

Posted by BankInfo on Tue, Jan 04 2011 08:33 pm

Grameen Bank has been appointed by a Chittagong-based packaging company as their managing agent in a deal, dating back 20 years, giving the poor borrowers' bank a job having nothing to do with its core business. Muhammad Yunus signed the deal for Grameen Bank, granting the microlending entity all rights-just ownership aside-to run and manage the packaging business, reports His father, Muhammad Dula Meah Saodagor, represented Packages Corporation as its managing director, in an apparent case of conflict of interest. He along with his sons owned the company incorporated in 1961 as Pakistan Packages Corporation.

The family still owns the company, and Yunus still sits on the board as a shareholder director, according to documents obtained by the news agency. Signed on June 17 1990, the contract was initially valid for 15 years. Three of Yunus' brothers-Muhammad Ibrahim, Muhammad Azam and Muhammad Jahangir-signed as witnesses to the contract between the father and the son who would secure a Nobel peace prize 16 years later. In 1997, the management of the packaging business was handed over to Grameen Shamogree, a sister concern of Grameen Bank.

"The handover," Grameen Bank deputy managing director Nurjahan Begum said in response to queries sent to Yunus, was executed "with consent of the owners" of Packages Corporation. The Grameen Bank managing director has evaded the news agency's requests for a face-to-face interview. Meanwhile, Prof Muzaffer Ahmed, an economist and former chairman of the trustee board of Transparency International, Bangladesh, has sharply reacted over the Grameen Bank controversy in selecting beneficiaries.

"I do not consider it an act of any moral standards," said Prof Ahmad.

"Nor was it legal," he said.

"Grameen Bank was mandated to dispense micro loans for poor people. Getting into such a contract with a family business was not morally right," said Prof Ahmad.

Mr Muzaffer, also chief of Sujan, a citizens' platform for justice, asked, "Why didn't Bangladesh Bank take any action then? Why didn't those who ran the government at the time take any steps?"

News Source: Financial Express/05 Jan 2011

Posted in Banking, Economics, News