March 08, 2011
According to the Wall Street Journal, a court has as expected ratified the Bangladesh Bank's removal of Muhammad Yunus as managing director of the Grameen Bank.
Another complex sequela: just as the Board and the Bangladesh Bank (the central bank) have been adversaries in court, they could fight over the choice of successor. Each side has a veto. Nine of the 12 board members are still elected Grameen members. However they are chosen and however independent they are from Yunus (or not) they can be expected to remain allies of the old guard. Perhaps that will play in favor of Dipal Barua, the deputy managing director let go last year. He is a longtime insider, born in the village where it all started and having worked with Yunus since the beginning, and now a dissident outsider. If the government moved quickly to nominate someone like him, that would be very reassuring about its long-term intentions with regard to preserving the Bank.An alternative scenario is a protracted struggle over succession. This could be bad for the reasons explained yesterday. Uncertainty can be deadly for a financial institution.
I guess Yunus and the Bank will appeal to the Supreme Court.
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