Norway gives clean chit to Nobel Laureate Yunus

Norway on Wednesday gave a clean chit to Grameen Bank founder Muhammad Yunus, saying it found no evidence of donor fund embezzlement by his bank, removing a cloud that had hovered over the Nobel Laureate.

"There is no indication that Norwegian funds have been used for unintended purposes, or that Grameen Bank has engaged in corrupt practices or embezzled funds," Norwegian Minister for Environment and International Development Erik Solheim said in a statement issued by the country's foreign ministry.

The minister, however, said the Bank had transferred the aid money to a sister non-profit company "breaching agreements" with the Norwegian donor NORAD but "the matter was concluded when the agreement concerning reimbursement of the funds was entered into in May 1998".

Solheim said that his statement was based on an investigation carried out by NORAD into media allegations of anomalies of funds following the airing of a Norwegian TV documentary.

The documentary and subsequent media reports alleged that Yunus had diverted $100 million meant for microcredit lending of Grameen Bank to its sister venture Grameen Kalyan, also a non-profit welfare company breeching Bangladeshs financial laws and agreements with the donor.

Bangladesh Prime Minister Sheikh Hasina earlier this week said that "there should certainly be a thorough investigation to find out what actually happened".

But she feared the Grameen Bank's exposure to the controversy could have occurred as it tried to play a "trick" to evade government taxes by transferring $100 million to a non-profit sister venture of the bank.

Hasina also appeared very critical of the "very high" interest rate the Grameen Bank charged its poor clients saying their microcredit mechanism did not allow the poor to come out of the poverty cycle as "micro-financers nurse poverty to run their brisk business".

Yunus, who is now on a tour abroad, in a statement immediately welcomed the primer's initiatives for investigation saying "I am confident that this (investigation) will resolve the matter and bring the truth to the citizens of Bangladesh as soon as possible".

Finance Minister AMA Muhith earlier, however, apparently came in defence of Yunus as the Grameen Bank trashed allegations of fund diversion breaching agreements with donors and violating Bangladesh's financial laws.

"I see no fault in the transfer of the fund, if their (Grameen Bank) claim (of doing so under an understanding with the Norwegian government) is true," Muhith said last week. Grameen Bank earlier in a statement alleged that the media reports gave the impression that these transactions or transfer were somehow "secretive" but there was nothing secretive about.

"There was no wrong doing in the agreement between Grameen Bank and Grameen Kalyan (to transfer the amount)," it said.