Surprising suggestion | The Daily Star
12:00 AM, April 26, 2011 / LAST MODIFIED: 12:00 AM, April 26, 2011

Surprising suggestion

Review body wants GB to take over Grameen Telecom

A government committee's recommendation that Grameen Bank take over the ownership of Grameen Telecom that holds over 34 percent share in Grameenphone is unrealistic and has no legal basis, said legal and telecom experts yesterday.
The committee, appointed by the government to review the management structure and activities of Grameen Bank, in its report also said it must be ensured that the microlender has ownership in Grameen Telecom so that its borrowers can benefit directly from the telecom operations.
GP, which made Tk 1,071 crore in net profit after tax last year, is the leading mobile operator in the six-player cell phone market in Bangladesh, accounting for over 43 percent of the country's 7.2 crore subscribers.
It is a joint venture by Telenor, the largest telecommunications service provider in Norway, and Grameen Telecom Corporation. The Norwegian company, which has operations in 12 other countries, owns 55.8 percent share and Grameen Telecom 34.2 percent.
The rest 10 percent belongs to general retail and institutional investors.
The government committee's recommendations have surprised many legal and telecom analysts.
“There is no legal basis for Grameen Bank to take over the ownership of Grameen Telecom,” a top lawyer of the Supreme Court told The Daily Star yesterday. “Grameen Telecom has not taken any money from Grameen Bank. Then how can Grameen Bank take over the shares of Grameen Telecom?”
He added that there is no link between Grameen Bank and Grameen Telecom, as the latter is a separate legal entity. “Grameen Bank has also never lent Grameen Telecom, as the microfinance bank can only grant loans for microfinance activities,” the lawyer said, requesting anonymity.
The SC lawyer also pointed out that an agreement between Telenor and Grameen Telecom does not allow the telecom entity to hand over or sell its shares to any party other than the Norwegian telecom giant.
Telecom analysts termed the recommendations utterly “unrealistic”.
Grameen Telecom is an absolutely independent entity. The government has no authority to dictate what it should do with its shares, said a telecom analyst.
“The government just cannot ask any entity to give its shares to any other party. This type of recommendations will raise questions about the efficiency of the review committee,” he added, asking not to be named.
Meanwhile, an official of the finance ministry said Grameen Bank does not own any stake in Grameen Telecom.
The inquiry committee led by Prof AK Monowar Uddin of Dhaka University submitted the report to Finance Minister AMA Muhith at his office in the secretariat yesterday.
The market value of the shares of GP, the bellwether of the stockmarkets, is more than Tk 7,000 crore. Yesterday, the shares of the lone-listed telecom company traded at Tk 155, down by 3.31 percent on the previous session of Dhaka Stock Exchange.

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