Nobel Peace Prize winner?s reputation under threat in riddle of ?40m loans

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*Fariha Karim, Dhaka, and Francis Elliott, Delhi*

The Times of London

The reputation of a Nobel peace laureate, credited with helping to defeat?global poverty through microcredit, hung in the balance last night after?allegations that he had diverted ?40 million from a bank set up to help the?poor.
Muhammad Yunus, internationally f?ted as banker to the world?s poor, now?faces an investigation by the Norwegian Government, which donated funds to?him.
It marks a further blow to the reputation of microfinance, once hailed as?the most effective way to help the most needy out of poverty.
The model of extending small loans to help to stimulate entrepreneurial?activity was pioneered by Dr Yunus in Bangladesh. It won him the Nobel Peace?Prize in 2006.
But letters obtained by a Norwegian film-maker suggest that Oslo?s embassy?in Dhaka was furious to discover that cash donated to his microfinance?vehicle, Grameen Bank, for housing loans had been diverted to another?company without its knowledge or permission. The arrangement, which Dr Yunus claimed had been made for tax reasons, was not mentioned in Grameen Bank?s annual report.
When his actions were challenged in formal correspondence, Dr Yunus wrote to?the head of an aid agency, Norad, asking for its help.
?This allegation will create a lot of misunderstanding within the Government?of Bangladesh. If the people, within and outside government, who are not?supportive of Grameen get hold of this letter, we?ll face real problem[s] in?Bangladesh,? he wrote.
Dr Yunus was ordered to return the money but while about ?17.6 million was?repaid, the rest of the funds were used for other social causes including?victims of cyclones, according to the Norwegian Government.
The chain of events ? which took place between 1996 and 1998 ? came to light?this week after the letters were aired as part of a documentary on microfinance that was shown on Norwegian television.
Although it said that there was no suggestion of tax fraud, a minister in?the current Oslo administration said that it was ?totally unacceptable? that?aid was used for purposes other than what was intended.
A report into the matter has now been ordered by the International?Development Minister after questions in the Norwegian parliament.
Dr Yunus could not be contacted for comment in Bangladesh last night and?aides said that he was out of the country.
A statement released by Grameen Bank said that the claims were false and?that a full explanation would be provided at the ?earliest convenient time?.
The Nobel Committee stood by Dr Yunus last night, admitting that it was?aware of ?isolated incidents? relating to Grameen Bank when it awarded him?the Peace Prize, but it does not plan to raise any further questions.
The director of the Norwegian Nobel Institute, Geir Lundestad, said: ?The?Norwegian Nobel Committee looked into Yunus and the Grameen Bank very?thoroughly before he was awarded the Peace Prize in 2006, and we used many?international and Norwegian experts to find out about the larger picture and?not just the isolated incidents. On this basis he was awarded the prize for?2006 and we are not raising any questions in this context.?
He refused to clarify whether the committee was aware of allegations of?financial irregularities, saying: ?We have a 50-year secrecy rule. I?m not?commenting on anything else.?
Erik Solheim, the Norwegian Minister of the Environment and International?Development, insisted that there were no suspicions of tax fraud or?corruption committed by the bank.
He added: ?Having said that, the Government of Norway finds it totally?unacceptable that aid is used for other purposes intended, no matter how?praiseworthy the cases might be.
?In the light of an audit review in 1998, Grameen Kalyan returned 170?million kroner [?17.6 million] to Grameen Bank. The additional funds have?among other projects been spent on emergency aid after a devastating cyclone?hit Bangladesh.
?I will ask the Norwegian Agency for Development Co-operation for a full?report into this matter. At the same time it is important to stress that we?are firm believers in microfinance as a tool in the fight against poverty.?
The allegations will further fuel the controversy surrounding microfinance?amid concerns that what has grown into a massive and largely unregulated?industry is doing more harm than good.
The Indian state of Andhra Pradesh, the hub of small-loan activity, cracked?down on microfinanciers after accusations that high interest rates and?aggressive debt collectors had led to more than 30 suicides.
Report in
Earlier article on Grameen Bank

Londoni Torture

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British man at centre of torture claims returns from Bangladesh

Foreign Office repatriates Faisal Mostafa but second ‘tortured’ Briton remains in detention

Ian Cobain, and Fariha Karim in Dhaka, Monday 14 June 2010 17.01 BST
A British man who was allegedly tortured in?Bangladesh while being questioned about his associates and activities in Britain has been flown back to the UK with the assistance of the Foreign Office.
Faisal Mostafa, whose detention?raised further concerns about British complicity in torture, was repatriated after negotiations with the UK government.
A second British national at the centre of?torture allegations remains in custody in Bangladesh. Gulam Mustafa, a 48-year-old businessman from Birmingham,?is also said to have suffered severe torture while being interrogated about mosques in his home city, associates and fundraising activities in the UK.
His alleged mistreatment is said to have ended four days before the British general election, when he was transferred from an interrogation centre in Dhaka to a prison hospital for treatment of injuries suffered during questioning.
Mostafa, 46, a chemist from Stockport, was detained in Bangladesh in March last year on terrorism-related firearms charges. He was accused of running a bomb factory at a madrassa funded by his British-based charity, Green Crescent Bangladesh UK.
He was released on bail in February for treatment for renal failure. His repatriation last week came a few days after the British authorities learned that the Guardian was planning to report on his case.
Mostafa’s lawyers say his ill health is partly a result of torture. They say he was suspended from his wrists for days at a time, hung upside down, subjected to electric shocks, beaten on the soles of his feet, deprived of food and exposed to bright lights for long periods. He is said by close friends to have suffered a number of wounds in his arms and other parts of his body that he says were inflicted by an electric drill.
Throughout the period he was being tortured, his lawyers said, he was questioned largely about his associates and activities in the UK, including his work for the Muslim parliament in London.
Bangladeshi officials have refused to comment on his repatriation but say the terrorism-related charges have not been dropped. He could be tried in his absence if he did not return to the country, they said.
The Foreign Office declined to answer questions about its role in Mostafa’s repatriation or say whether it had made any representations about his allegations of mistreatment.
A spokesperson said: “We take all allegations of torture and mistreatment very seriously and raise them as appropriate with the relevant authorities. We will never condone the use of torture.”
The UK high commission in Dhaka said it had “made the Bangladeshi authorities aware of a number of issues” concerning Mostafa’s case, and pressed them to treat him according to international standards. But it would not say whether it had made any complaints.
Mostafa came to the attention of British police and MI5 in the mid-90s, having been tried and acquitted on charges of conspiring to cause explosions in 1996. He was sentenced to four years for illegal possession of a pistol with intent to endanger life.
Four years later he was arrested after police and MI5 officers discovered chemicals that could be used to produce the high explosive HMTD at a house in Birmingham. Traces of the explosive were also found on the pinstripe jacket he was wearing at the time of his arrest.
Mostafa was acquitted although his co-defendant was convicted and jailed for 20 years. In 2006 John Reid, the then home secretary, cited this case when he said al-Qaida’s plots against the UK preceded British involvement in the invasion of Iraq or the war in Afghanistan.
Counter-terrorism officers in Dhaka said they had investigated about a dozen British nationals in recent years at the request of UK intelligence officials. One senior Bangladeshi officer told the Guardian that this was done in a manner that would have been unlawful in the UK “because of the question of?human rights“, but declined to elaborate.
British security and intelligence officials warned three years ago that significant numbers of Britons were travelling to Bangladesh to train in terrorist techniques.
The country remains a concern to UK officials.
Known or suspected plots with links to Pakistan have reduced slightly in number, while Somalia, Yemen and Bangladesh are said to pose potential problems. It is thought that one British-Bangladeshi man has killed himself in a suicide bomb attack, possibly in Afghanistan.
Mustafa, 48, a businessman from Birmingham, whose UK assets were frozen three years ago under counter-terrorism powers, was detained in April and held in a detention centre known as the Taskforce for Interrogation Cell, where the use of torture is alleged to be common.
When he appeared in court 11 days after police announced his arrest, a journalist working for the Guardian could see that he was unable to stand throughout the proceedings. At one point he sank to his knees.
His family’s solicitor, Gareth Peirce, complained to the then foreign secretary, David Miliband, in a letter that stated: “It is already well known that MI5 has been co-operating with the Bangladeshi authorities and providing and exchanging information with them about Mr Mustafa.” Miliband’s reply did not address the allegations of MI5 complicity. Last week the Foreign Office declined to say whether it had made any representations to the Bangladeshi government about his alleged mistreatment.
Mustafa was transferred to the hospital wing of a Dhaka prison on 2 May and is understood to have been receiving treatment to injuries to his knees and spine.
His Bangladeshi lawyer, Syez Mohsin Ahmed, said: “Gulam Mustafa was physically assaulted and tortured. Medicine, or chemicals, were put on his face and in his mouth to break him down so he would answer their questions. He was blindfolded, and his hands and feet were tied. Now he is receiving treatment for torture.
“He was told that if he admits the allegations against him, he would be released and sent back to London because he is a British national. He was threatened that if he doesn’t admit what was claimed against him, he would be killed in ‘crossfire‘ and so would his family.
“His family members told me that when he was detained, the police told them to tell him that if he didn’t admit the allegations, they would all be killed in crossfire. They also said that if he speaks to the media, they would harm him.”
According to Bangladeshi media reports, the UK high commission has been negotiating the release of Mustafa and another man, Mohiuddin Ahmed, a senior organiser of the Bangladeshi branch of the Islamist movement Hizb ut-Tahrir.

Occupational Hazards

By Fariha Karim

Intimidation is a hazard of the job for Nurul Kabir. The outspoken newspaper editor faced it during his first days on the beat as a reporter, and even before, as a student activist. ?Intimidation by the powers that be is a part of my life, and it has always been that way,? he said.
It was days after he had been warned to leave the country, and Kabir was back behind his desk at the New Age office, a slightly framed man behind a towering pile of books, papers and letters, a twist of smoke curling up from the cigarette in the ashtray beside him.
Most recently, his opponents have included the Bangladeshi military. He has been a vocal critic of the military-controlled caretaker government of the last two years, a consistent thorn in their side, doing his job as a responsible journalist and shining a spotlight on those who wield power.
And his comments, repeated again and again in his newspaper and during talkshows on private TV channels, have included demands for a strong army in the interests of the security of the nation state. For this to happen, he argues, military leaders need to stop meddling with politics.
Now, unconfirmed reports say he is being threatened by the military. Sources claim his life is in danger, and he has heard that army officers have demanded ?Nurul Kabir has to be taken care of?.
A few days ago, his fresh-faced young driver, Nazib, 20, was threatened at gunpoint during a terrifying car chase which left him barely able to breathe. As he made his way home alone after dropping off his boss, he was followed and criss-crossed by six men riding two super powered Honda motorbikes.
?I thought they were going to kill me,? Nazib said. ?All of them were wearing green helmets, and the guy in the middle, he had something sticking out of his arm, like a gun, and was pointing it at me. I was driving at over 100 miles per hour, and I still felt like the car wasn?t working.?
But why is it that a man who is trained to write is seen as a threat by men who are trained to kill?
Maybe it’s because Nurul Kabir has built up his own following of unwavering supporters disciplined by facts and argument instead of military drill, largely through appearing on talkshows. And this has taken place because of the courage of his colleagues who have given him the airtime. Before the military-controlled caretaker government, public criticism of the military was largely taboo. But the last couple of years have shown that journalists are prepared to resist in the most dangerous of circumstances. When ex-President Iajuddin Ahmed declared a state of emergency, threatened censorship and longer prison sentences, coverage of the more unwanted aspects of the regime grew.
And there was a cost ? journalists were arrested, tortured, and in the case of Dainik Giri Darpan correspondent Jamal Uddin, feared killed (though the official explanation was suicide). The country?s first 24-hour news channel, CSB, was pulled from the airwaves following footage of violent clashes between students and police at Dhaka University, and Ekushey was also heavily leaned on.
None of the perpetrators were brought to justice, and the attacks continued. So did the journalists. Private broadcasters defied bans to stop airing news and current affairs programmes. despite the risks. And of course, the public tremendous desire to consume current affairs, aided by the growth of television in rural areas, spurred them on.
Now, the guns are trained on Kabir ? and his poor, innocent driver ? at one of the most sensitive of times, in the wake of the BDR rebellion which claimed the lives of four civilians, six BDR soldiers, and 56 officers. It is one of the greatest losses of officers suffered in the history of the country. But, according to Kabir, “they?re conspiring to harm me when they?re not in power. Now there is an elected government. If I?m killed tomorrow, the government will get the blame. And they?re using this [the aftermath of the rebellion] as an opportunity, when officers are emotionally charged.?
From their most recent record, journalists and their co-workers have shown they are prepared to fight against the harshest of odds. When the state has upped the ante, so have they. Condemnation of the car chase has come not only from colleagues in the Dhaka Union of Journalists but also other quarters, including architecture, anthropology, women?s rights activists and judges.
As long as the state continues to try and silence this man, they?re in for the big fight. The battle lines have been drawn.