Nobel Laureate
Muhammad
Yunus Stands against Telenor
In
the case involving Grameenphone in Bangladesh and mobile communications
service provider Telenor, Nobel Peace Prize Laureate Muhammad Yunus is
going to discuss charges against Telenor on Friday, Sept. 5, in Oslo,
Norway. He expects Telenor to honour its written intentions, law of
Bangladesh, and the high ethical standards demanded by the people of
Norway. Here’s a statement from Professor Yunus.
In 1996,
with great hopes and excitement we, as Grameen Telecom, partnered with
Telenor to launch a mobile telephone company, Grameenphone, in Bangladesh.
The purpose of the telephone company was to bring telephone services in
the rural areas of Bangladesh and to empower poor rural women by turning
them into "telephone ladies." The telephone company became a successful
company in terms of rapid growth and high profits, but the partnership
between Telenor (62% shareholder) and Grameen Telecom (38% shareholder)
has become difficult. Telenor is effectively running the joint company and
has been in charge of the management from the beginning.
Both
Telenor and Grameen Telecom seek to maintain and expand the growth and the
profits in the phone company, Grameenphone. The agenda of Telenor to
maximize returns for the benefit of its owners is, however, in conflict
with the social and non-profit agenda of Grameen Telecom.
The
differences between Grameen and Telenor relate to business ethics and
corporate governance. Grameen follows strict business ethics. Telenor knew
this when we became partners. Telenor knew we expected strict business
ethics to apply to any organization or entity we participate in and that
we as a non- profit organization rely on the statements of our partners.
Unfortunately, the telephone company recently has been criticized for
labor violations by its contractors, for violation of environmental law
and for engaging in illegal telecom activities in Bangladesh. Journalists
have recently revealed cases where children have been working for the
subcontractors of Grameenphone. On September 4, 2008, the Norwegian
state-owned television NRK released pictures of children under 14 years
who are building parts for Grameenphone cell phone base stations. The
pictures are, according the NRK's homepage, taken at Gazi Engineering in
Dhaka, Bangladesh. The pictures document children who are working with
welding apparatus without any protection. Grameen and I can not be
identified with this.
Bangladeshi authorities on two different occasions found that the
telephone company was not in compliance with Bangladeshi law. In total,
the company was fined US $60 million. US $60 million is a huge amount of
money. In Bangladesh, USD 60 million is enough to pay for over 2 million
cataract eye operations, giving that many people their sight back. It is
enough to educate over 500,000 girls for one year.
The
breach of Bangladeshi law imposed a risk of loss of the company's license
as telephone operator. Furthermore, I personally have been condemned by
the Bangladeshi media for this violation of Bangladeshi laws and have been
accused of making illegal money. All this while I devote myself to
upholding a high ethical standard. The people of Bangladesh know the phone
company is a "Grameen" Company and the phone company thus must stand for
the values the Grameen name promotes. The people do not understand that
Telenor runs the company and that Grameen Telecom hardly has any effective
say in the company operation.
Grameen
Telecom and I have not yet been given all the facts we need to have a
complete understanding of the alleged illegal activities. However, those
activities should be fully and independently investigated and disclosed.
We want the majority shareholder Telenor to authorize complete
transparency in all these matters, including the release to the public of
the shareholders agreement and all investigations of the alleged charges.
We cannot allow the Grameen name to be tarnished directly or indirectly by
inappropriate operations.
We
recently have received the police report from the authorities'
investigation of the illegal activities. Another company, a
Malaysian-based company named DiGi Telecom Ltd., is accused of
contributing to the illegal activities. DiGi Telecom also is accused of
laundering money through an account in Singapore. DiGi Telecom Ltd is
owned 61% by Telenor. 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
Grameen Phone Ltd are involved in encouraging the illegal VoIP business in
the international field."
The
reputation of Grameen and the hard and honest work of its now 300,000
telephone ladies have been an important factor in the success of the phone
company in Bangladesh. The telephone ladies became internationally
acclaimed as successful entrepreneurs through mobile technology, and
Telenor reaped financial benefits from this. Now the goodwill the Grameen
name provides to the telephone is being undermined by these alleged
illegal activities.
Back in
1996, Telenor and we agreed that the joint company within six years should
be a locally operated company with Bangladeshi management and Bangladeshi
majority ownership. This has not happened. Telenor is unwilling to let go
control of the company. 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.
We
believed in the agreed intentions of the parties. We believed in business
ethics and generally accepted company government rules of conduct. We
believed that a Norwegian public listed company, controlled by the
Norwegian government, a government supportive to the poor people of
Bangladesh, would do as agreed. Telenor now tells me that it was a mistake
to rely on their words.
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. Although Grameen Telecom will see that social
objectives will be implemented in the management of the phone company,
Grameenphone, it will seek to maintain and expand the growth and the
profits in the phone company. The poor people of Bangladesh, through
Grameen Telecom, will benefit from the ownership in and dividend from
Grameenphone. I remain hopeful, however, that such legal action will prove
unnecessary because the owners of Telenor will require the company to
honor the intention it expressed in 1996 to transfer ownership and control
of Grameen Phone to the poor of Bangladesh. In light of the recent alleged
illegal activity, that transfer should now occur as soon as possible
before further damage is inflicted on the Grameen name.
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. I am confident the people of Norway
will see to it that the companies that they own and control honor their
written intention, in all cases, and especially when dealing with the poor
women of Bangladesh.
Your
Comments:
