Compromise on Aid
The reason was the Norwegian requirement that 608 million kroner, which had been transferred from Grameen Bank to a newly created company (Grameen Kalyan), in its entirety must be returned to the Grameen Bank, which along with Yunus received the Nobel Peace Prize in 2006.
Of the total amount of 608 million kroner was, according to the Norwegian Embassy roughly 279 million provided by Norway.
The compromise was, according to the aforementioned letter from the embassy on that 120 million given in aid from Norway as a “final solution” returned to the Grameen Bank, “against the remaining funds allocated to the Grameen Bank on loans and revolving funds remain in the Grameen Kalyan ownership “.
On 7 December, a week after NRK showed the documentary “Caught in Micro Debt”, Norad/MFA came with a report of what happened with the Norwegian funds.
Here is the conclusion that 170 million was returned to the bank from Grameen Kalyan after negotiations between Norad and the Grameen Bank,and that it was never entered into any compromise:
“With this, Norad and the Embassy’s requirements are met. When the embassy in a letter dated 05/26/1998 coined the term “compromise”, it was linked to the Grameen Bank’s invitation to negotiate a compromise. The Embassy and Norad had met all their demands for negotiations. ”
This stands in contrast to the secret stamped documents NRK Brennpunkt found in Norad’s archives. It says that the Embassy and Norad wanted the following Norwegian kroner assistance should be returned to the Grameen Bank:
NOK 120 million awarded to Grameen Bank’s so-called revolving funds (mainly funds for housinh loans) during Phase IV (1993-97).
NOK 64.8 million awarded to Grameen Bank to the revolving fund under Phase III (1989-92).
NOK 94.25 million given to the Grameen Bank to housig loans for flood victims as additional appropriations (1987-92).
Norad did not explain the difference of 14 million.
Second, Norad away from the aid of 94.25 million crowns provided as additional appropriations. The largest component of this was the housing loans for flood victims who Embassy / Norad then in the secret documents that had demanded be returned from Grameen Kalyan to Grameen Bank.
Despite the fact that Norwegian aid authorities at the time believed that all these Norwegian amounts were unlawfully tapped from Grameen Bank, they went in for a compromise. In the aforementioned letter from the embassy to Norad 5 May 1998 justified this by saying that Norway is not the law in hand expect more:
“After the embassy’s view compromise proposal represents a satisfactory solution in relation to what might be applicable legal
Others were also involved
It is also worth noting that Norad’s statement does not take up the aid money from other countries and institutions that were transferred from the Grameen Bank to Grameen Kalyan.
Grameen Bank was under the Phase III funded from the Assistance Consortium, consisting of NORAD, SIDA, IFAD, CIDA, GTZ, KfW and the Ford Foundation. Together, these institutions contributed with 420.4 million to the revolving funds in the period 1989-92.
In 1998, the contact Norad, SIDA, the Swedish aid authorities to notify them of the transactions from the Grameen Bank Grameen Kalyan. Focus has been told that from SIDA, the Swedish contribution during Phase III was the entire 190 million.
SIDA, however, chose not to pursue the matter, because they did not want to destroy the “credibility of the Grameen family,” as it says in a letter from the Swedish Embassy in Bangladesh, dated 17 March, as the Focal Point has received from SIDA:
“No one wants two make a big thing out of this as it might harm the creditability of the Grameen family and pray That Would detrimental to the whole Cause.”
Based on the secret documents Brennpunkt found in Norad’s archives, there are many factors that the public still have not received an explanation or full access to:
608 million NOK was not that donors were informed transferred to Grameen Kalyan, who had a completely different purpose than the Grameen Bank (among other things, to create joint ventures, invest in other companies, invest capital in shares, etc.).
50 million had already been transferred from Grameen Kalyan to Grameen Telecom / Grameenphone when the embassy raised the alarm. Whether and how much money has gone from Grameen Kalyan for other purposes, is not known.
The Embassy / Norad agreed to a compromise of 170 million, which meant that not all of the Norwegian funds Embassy / Norad ever felt was unjustly transferred, was returned to the Grameen Bank.
We have no evidence to show that Grameen Kalyan has returned the rest of the aid funds provided by other countries / institutions to Grameen Bank’s claim.
Swedish aid agencies (SIDA) would not join in the Norway’s demand for repatriation of funds because they would not
damage the Grameen Bank’s good name and reputation.
The Embassy / Norad reacted strongly to the time that the money was transferred in part to save tax.
Grameen Bank still using tax argument when they are currently defending the transaction.
All documents in the case was classified. Norad has not explained as to why this was done.