Bangladesh to take legal action against noted economist Muhammad Yunus

Bangladesh's cabinet on Monday decided to initiate legal action against noted economist and Nobel prize winner Muhammad Yunus for what it called "irregularities during his time as head of the Grameen Bank".

The cabinet meeting with Prime Minister Sheikh Hasina in the chair made the decision after receiving a probe report from the country's National Board of Revenue (NBR), Xinhua reported citing government spokesperson Musharraf Hossain Bhuiyan.

The NBR was asked last year to look into the economist's incomes from foreign sources.

Bhuiyan said Yunus received a total of $6.25 million as honorarium, awards and royalties from a number of foreign institutions from 2004 to 2011. Of the money, he said, $1.6 million was exempted of tax.

Since Yunus received foreign money without permission from relevant government authorities despite being a public servant, the NBR thinks the tax exemption was not proper, Bhuiyan added.

Apart from this, Yunus breached law by transferring funds from Grameen Bank to Grameen Kalyan, one of its associated organisations. Yunus also lent money to an organisation linked with his family at a low interest rate, Bhuiyan added.

He added that the central bank of Bangladesh and the revenue board may go for legal action against Yunus and the ministry of law will extend legal assistance to them if need be.

Yunus Centre said the allegations raised by the NBR were "baseless". A statement to this effect came hours after the government decided to take legal action against Yunus who was relieved by the Bangladesh Bank in March 2011 from the Grameen Bank, with which he shared the Nobel Peace Prize in 2006.

The Bangladesh Bank said Yunus was well past the retirement age of 60.

Prime Minister Sheikh Hasina's cabinet last year ordered a fresh probe against Yunus over irregularities during his time as head of the Grameen Bank.

Supporters of 71-year-old Yunus claim the respected economist is the victim of a political vendetta for his 2007 initiative to form his own political party, backed by the powerful army when the country was under a state of emergency.