Global Biz

Nobel laureate Yunus loses legal fight to keep job

(Agencies)
Updated: 2011-04-06 16:14

Employees of Grameen Bank take part in a sit-in protest in front of their central office in Dhaka April 5, 2011. Bangladesh's highest court rejected on Tuesday an appeal by Nobel laureate Muhammad Yunus against his dismissal as managing director of Grameen Bank, the microlender he founded. [Photo/Agencies]

DHAKA, Bangladesh- Nobel laureate Muhammad Yunus lost his final court appeal Tuesday to remain in control of the pioneering microlending bank he founded nearly three decades ago to lift Bangladeshis out of poverty.

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The ruling capped a monthlong dispute between the government and Yunus _ an outspoken government critic- over the right of the "banker to the poor" to continue as managing director of the Grameen Bank.

Bangladesh's central bank removed the 71-year-old Yunus from the post last month, saying he violated banking regulations on retirement. The High Court upheld his removal and he appealed then to the Supreme Court, his last legal option.

Yunus has said the dismissal was illegal and alleged that the government was trying to take control of his bank, which pioneered the practice of giving tiny loans to alleviate poverty. His work spurred a boom in such lending across the developing world, earning him and the bank the 2006 Nobel Peace Prize.

No compromise was reached by Tuesday.

"The appeal is dismissed," Chief Justice ABM Khairul Haque said in his one-sentence ruling at a crowded courtroom of the country's highest court.

Attorney General Mahbub-e-Alam said Yunus cannot hold the post any longer.

Yunus was not in court, but he told his staff that he respects the ruling.

"It's time for you to work with greater dedication to keep this institution effective," Yunus told about 300 staff members at his headquarters in Dhaka. "You must not let this institution slide down."

He urged the staff members, some of them in tears, to remain alert "so no dishonest people can destroy this institution."

Chairman of Grameen Bank Khondaker Muzammel Huq said he will soon call a meeting of Grameen board of directors to "decide next course of action." He did not provide details.

Yunus has long had frosty relations with Prime Minister Sheikh Hasina.

She was reportedly angered by Yunus' 2007 attempt to form his own political party, backed by the country's powerful army. Hasina has accused Grameen Bank and other microfinance institutions of charging high interest rates and "sucking blood from the poor borrowers."

At the center of the court case was whether Yunus was exempt from a banking law setting the retirement age at 60. The central bank says its approval was never sought for an exemption allowing Yunus to stay.

Grameen contends the central bank implicitly approved because it raised no objections when it audited Grameen.

The microlending bank currently has nearly 9 million borrowers in Bangladesh, 97 percent of whom are women. Without needing collateral to borrow, many use their small loans to make ends meet or to start small businesses.

Yunus' legal battle has sparked international concern and threatened to dampen ties between Bangladesh and the United States.

Last month Robert Blake, assistant secretary of state for south and central Asian affairs, visited Yunus during a trip to Bangladesh, told reporters the US was "deeply troubled" by the situation and said that if no compromise was reached "I think it will have an effect on our bilateral relations."