Yunus Centre that promotes the works of Nobel Laureate Prof Muhammad Yunus has responded to Sunday’s remarks by Finance Minister AMA Muhith on social business. Following is the full text.
Hon. Finance Minister’s Remark: None of the Social Business Organisations have any institutional foundation.
Response: All of the social business companies are registered with the Registrar of joint stock companies and have all the relevant permissions and licenses from the government ministries, agencies, regulatory authorities to operate. All social businesses companies hold their regular board meetings and are audited externally on an annual basis. They all pay taxes regularly. The GB Inquiry Commission are in possession of all documents from Grameen social businesses and can verify this easily.
Hon. Finance Minister’s Remark: We do not know what will happen when he (Professor Yunus) leaves these institutions.
Response: The social business organisations have all been founded by Professor Muhammad Yunus. Each company has its own separate management structure, headed by its CEO and his/her competent staff. These companies will continue to operate according to the by laws of each company, on the basis of which they were formed, into the future, as is the case for all companies that operate in the land.
Hon. Finance Minister’s Remark: Professor. Yunus is also making social investments like selling yoghurt for improving public health status but these are mainly non-profit ventures.
Response: Grameen Danone produces and sells fortified yoghurt for reducing malnutrition among the children. Like other social businesses this is also a for-profit business where the owners never take out any dividends, except to recoup the initial invested amount .
It is wrong to say that “these are mainly non-profit ventures”, because they are for-profit ventures where owners don’t take any dividend by their own choice.
All the social business companies are profit making companies. In a social business, the investors/owners only recoup the money initially invested by them, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company; no personal gain is desired by the investors. That is the basic concept of social business.
Many companies founded in earlier years by Professor Yunus were designed as section 28 companies, which do not have owners. These are companies limited by guarantee. These do not fall in the category of social business since they don’t have any owners.
Hon. Finance Minister’s Remark: Prof Yunus had spent all the dividends from Grameen Phone in the social business companies.
Response: Grameen Telecom, not Professor Yunus, has received profits from Grameen Phone, as owner of Grameen Phone. Grameen Telecom donated this money to Grameen Telecom Trust. The trust has “invested” some of this money, not “spent”, in social business companies that aim to help solve specific social problems faced by the poor people, especially women.
Hon. Finance Minister’s Remark: But when Dr Yunus established Grameen Phone he said all of its profits will go to Grameen Bank. But Grameen Bank did not get any benefit.
Response: Grameen Phone never had any agreement with the Government to give away money to anyone. Government gave telephone license to Grameen Phone, not to Professor Yunus. If government had wanted to put any pre-condition for license, this
would have had to be incorporated in the license agreement, and the government could sue the company if they violated any such condition. To our knowledge no such pre-condition was ever discussed let alone imposed. If any pre-condition exists beyond our knowledge, government should sue GP, instead of making complaints about violation.
Hon. Finance Minister’s Remark: I think in the last 20 years Grameen Bank has got at best Tk 200 crore from Grameen Phone. The rest went to social investment projects
Response: Grameen Bank does not own a single share in Grameen Phone (GP). Since GB is not a shareholder of GP, why would Grameen Phone give any money to Grameen Bank, leave alone Tk 200 crore. Grameen Telecom receives the dividend from GP, as part owner of GP. It did not receive this money from GP as a favour.
Hon. Finance Minister’s Remark: The in-charges of these companies have all been hand-picked by Prof Yunus.
Response: All the heads of Grameen companies are appointed by the board of each company according the company laws. These are all recorded in Board decisions.
Hon. Finance Minister’s Remark: Hon. Finance Minister Mr AMA Muhith dubbed as unrealistic Prof Yunus’s recommendation to raise the wage of garment workers in Bangladesh in line with international standards.
Response: Professor Muhammad Yunus’s proposal is to create international minimum wage for each garment exporting country, by the international buyers, individually, or in groups, or collectively, on a voluntary basis, so that element of exploitation of poor workers is removed. He proposed that 50 cent per hour could be an acceptable level of such international minimum wage for Bangladesh. Professor Yunus did not ask the government or anyone else to “impose” such minimum wage. He is campaigning for voluntary acceptance of the concept of international minimum wage by the buyers. The idea has been lauded internationally, as a practical solution to the existing exploitative wage in an international sector of business.
Source: The Daily Star
