DHAKA: Bangladesh's Nobel-winning microfinance pioneer Muhammad Yunus on Thursday began a legal battle to overturn an attempt by the government to sack him from the bank he founded.
A day earlier, the central bank fired the 70-year-old leader of Grameen Bank, saying he had been "removed from his position" as managing director for failing to follow the law when he was re-appointed in 2000.
But Yunus defied the order, returning to work as normal on Thursday at Grameen's headquarters in Dhaka and lodging a case in the High Court contesting the legality of the Bangladesh Bank's order to remove him.
"Yunus was not given even a show-cause notice saying why it was illegal for him to be managing director of Grameen," Yunus's lawyer Kamal Hossain told the court.
"Yunus himself had expressed his intent to retire on many occasions, but why is this humiliation for such a respected person? This is like destroying the image of the country," he said.
The government's lawyer, attorney general Mahbubey Alam, told the court that Yunus had not followed the proper procedure when extending his tenure.
"There is also no doubt as he is over 60 so he cannot hold the position," Alam added, referring to a government rule that state bank employees retire at 60.
The court will issue its ruling on Sunday, officials said.
Supporters say Yunus's troubles stem from 2007 when he floated the idea of forming a political party, earning the wrath of powerful Prime Minister Sheikh Hasina who has publicly disparaged his work.
Grameen Bank pioneered micro-lending in the 1980s, a system in which small amounts of money are lent to poor entrepreneurs outside the mainstream banking system, catapulting Yunus to international fame and his Nobel Peace Prize in 2006.
Finance Minister A.M.A. Muhith told foreign ambassadors and heads of multilateral agencies in Dhaka that the government had no choice but to remove Yunus because he had held the position illegally since 2000, as he had failed to seek the central bank's prior approval when he was re-appointed.
"The law took its routine course. Bangladesh Bank exercised its powers under section 45 of the Banking Company Act of 1991," Muhith said, according to a copy of his speech seen by AFP.
The legislation grants the central bank sweeping powers, including the right to dismiss senior management figures at private banks -- a power it has invoked several times in the past.
Muhith said the government was not seeking to destroy Grameen Bank itself, which was "an institution in which the government takes pride."
Yunus's supporters have rallied around him, with the American Ambassador James F. Moriarty telling reporters on Thursday that the sudden removal of Yunus was "very difficult to understand."
"It strikes us as an unusual way to handle a Nobel laureate who is considered outside (of Bangladesh) as one of the greatest Bangladeshis," he said.
The "technical issue" for which Yunus has been removed dates back 10 years, and it is "deeply troubling" it has suddenly been used against him, Moriarty said.
"(Yunus) has done great things to pull people out of poverty so to remove him... years later over a technicality is very difficult to understand," he added.
Norway, a funder of Grameen, spoke out strongly against the attempts to force Yunus out, with International Development Minister Erik Solheim telling news agency NTB on Wednesday that his removal was "a very sad development."
"What we see is a brutal internal power struggle in Bangladesh... Yunus was a popular person, both at home and abroad, and that always leads to opponents," he added, hinting at the rivalry between Yunus and Hasina.
Local economists warned the government's "hasty decision" could prompt a collapse of confidence or even a bank run in the country's vast microfinance sector.
Grameen Bank, which is 25 percent state owned, has more than eight million customers, providing collateral-free loans in 82,000 villages across Bangladesh.
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