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Saturday, September 6, 2008

Yunus may sue Telenor

Nobel laureate Dr. Muhammad Yunus may sue Telenor

Nobel laureate Muhammad Yunus might take legal actions against Telenor to force the Norwegian telecom operator to honour a deal concerning their joint subsidiary in Bangladesh.
Telenor owns 62 percent shares while Yunus' Grameen Telecom holds the remaining stakes in GrameenPhone, launched in 1996.
Pointing out Telenor's alleged involvement in illegal internet telephony services and allegations of violating environmental law and employment of underage workers by its subcontractors, the 'banker of the poor' demanded that Telenor authorises complete transparency in the matters, making public the investigation reports and shareholders' agreement.
"We cannot allow the name of Grameen to be tarnished directly or indirectly by inappropriate operations," Yunus said in a statement distributed through PR Newswire yesterday.
Telenor, meantime, said yesterday that it hopes for an amicable solution to the row with Muhammad Yunus over Grameenphone which it aims to list on the Dhaka bourse, according to wire services.
The Nobel laureate also hoped that legal actions might not be needed after all 'because the owners of Telenor will require the company to honour the intention it had expressed in 1996 for transferring ownership and control of GrameenPhone to the poor of Bangladesh', adding that the transfer should take place at the earliest before the reputation of Grameen is damaged further.
"I am very optimistic about the eventual outcome of this controversy because it is really in the hands of the people of Norway, whom I have come to know and trust. Norwegians set a very high standard for business ethics, and they are the majority owners of Telenor," Yunus said in the statement released in response to media interviews.
Referring to the 1996 deal, Yunus said Telenor and Grameen Telecom agreed that the joint company should become a locally operated company within six years with Bangladeshi management and majority Bangladeshi ownership.
"This has not happened. Telenor is unwilling to let go control of the company," complained Yunus adding, "We now are being told that the words of the written agreement in a legal sense are non-committing statements. We relied on the words of the agreement."
Saying that Grameen Telecom believed in the agreed intentions of the parties, business ethics, and generally accepted company government rules of conduct, believing that the Norwegian public listed company would do as agreed, Yunus wrote, "Telenor now tells me that it was a mistake to rely on their words."
Yunus' statement about a possible lawsuit surprised and disappointed the Telenor authorities, said the company's Head of Communications Paal Kvalheim.
"We have had a good dialogue lately and we had hoped to continue this," he told Reuters.
Telenor reiterated that it still aims to list Grameenphone on the bourse, according to wire services.
"The IPO could be this year or next ... At the moment, things are a bit unpredictable," Telenor spokesman Dag Melgaard said. He however declined to say how much share Telenor will hold after the IPO.
Pointing out that Telenor has been in charge of the management of GrameenPhone from the beginning, Prof Yunus said the agenda of Telenor is to maximise returns for the benefit of its owners, which is in conflict with the social and non-profit agenda of Grameen Telecom.
Yunus went on, "Telenor knew this when we became partners. Telenor knew we expect strict business ethics to apply to any organisation or entity we participate in and that we as a non-profit organisation rely on the statements of our partners."
He pointed out that there are differences between Grameen and Telenor on matters of business ethics and corporate governance.
Referring to the release of pictures by Norwegian state-owned television NRK on September 4 of children aged under 14 building parts for Grameenphone cellphone base-stations in Gazi Engineering in Dhaka, Yunus said, "Grameen and I cannot be identified with this."
"Bangladeshi authorities on two different occasions found that the telephone company was not in compliance with Bangladeshi laws. In total, the company was fined US$60 million," he said adding that the violation of Bangladeshi laws poses a risk to the company of losing its license as a telephone operator.
He personally has been condemned by the Bangladeshi media for this violation of laws and have been accused of making illegal money, the Nobel laureate said.
"The people do not understand that Telenor runs the company and that Grameen Telecom hardly has any effective say in the company operation," he added.
Referring to a police report, he said Malaysia based company DiGi Telecom Ltd, 61 percent of which is owned by Telenor, was accused of money laundering through an account in Singapore.
"The police report includes severe information regarding Telenor's involvement in the activities, and states: It can be perceived to the committee members that the majority shareholders of GrameenPhone Ltd are involved in encouraging the illegal VoIP business in the international field," Yunus said in his statement.
The goodwill the name of Grameen provides to the telephone company is being undermined now by these alleged illegal activities, he said.
"The recent activities in Bangladesh leave me with little alternative other than to investigate the possibility of taking legal action to protect the interests of the millions of poor people in Bangladesh who stand behind Grameen and who will be the ultimate beneficiaries if the phone company comes under Bangladeshi ownership and management to become a company with social objectives," Yunus asserted
The recent row between Yunus and Telenor became a news item for many international news agencies and newspapers over the last two days.

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