The government is taking legal actions against Muhammad Yunus for his alleged irregularities and abuse of office when he was the Managing Director of Grameen Bank.
The Nobel laureate recently came out in support of a caretaker government oversight for looming general elections amidst a tussle between him and the government over the future of Grameen Bank..
According to the decision of Monday’s Cabinet meeting headed by Prime Minister Sheikh Hasina, allegations of evasion of tax by wrongly claiming tax relief, violating foreign travel regulations and misuse of power will be levelled against him.
The government made the move after it received the joint investigation report from the National Board of Revenue (NBR) and Internal Resources Division (IRD).
When asked if a case would be filed against Yunus, Cabinet Secretary Muhammad Musharraf Hossain Bhuiyan who briefed the press after the Cabinet meeting said legal action would follow in these matters but did not specify any time frame.
The Cabinet had asked the National Board of Revenue to provide them with a detailed report on how much funds Yunus had brought from abroad while heading the Grameen Bank and whether any of that was illegal and the tax relief he claimed was justified or not.
The request was made on Aug 2, 2012.
The NBR and the IRD completed their investigation during the past one year and now submitted the report, on the basis of which legal action will be started.
The Cabinet Secretary said Yunus had travelled abroad frequently while he was in charge of Grameen Bank and had received more than Tk 500 million as royalty, prize or honorarium.
He was exempted from paying income tax worth more than Tk 120 million.
The tax exemption privilege Yunus received was not in line with the regulation, said the IRD report. The Grameen Bank Ordinance exempts the bank from paying income tax, but it does not extend to any other institution under it.
Terming Yunus a ‘public servant’, the report said he was bound to take the approval of relevant authorities before travelling abroad, which he did not.
According to the rule, he could function as Managing Director until he was 60, said the Cabinet Secretary citing the report. According to his service contract, for continuing the service after 60 he was not supposed to receive any other benefits other than the salary. But the former MD enjoyed almost all privileges during that tenure.
“He also facilitated his family establishment to get low-interest loan from Grameen Bank. That is a misuse of authority,” the Cabinet Secretary said.
Regulation was also violated when he transferred funds from Grameen Bank to Grameen Kalyan, the report further said.
“The Cabinet decided to take necessary measures against the irregularities as per the country’s law,” said Bhuiyan.
The NBR will initiate measures for the tax evasion. The Banking Division will take action against the bank-related issues. They will take the help of law ministry if required.