Tuesday, December 19, 2006

Muhammad Yunus No Saint

This is what can happen if you give the Nobel Peace Prize to a still active business man: he tries to use the PR around the prize ceremony to push through a transaction.

In 1997, Norwegian Telenor started a joint venture with Muhammad Yunus to set up GrameenPhone. The company gives women, through those famous micro-credits, the chance to buy cellular phones so they can set up small phone centrals and earn some money for their living. At the same time, these small phone centrals give the until now isolated rural communities a possibility to communicate with the rest of the world. Or two birds killed with only one stone.

The original plan was to obtain 250,000 customers in the course of the first ten years, but today GrameenPhone has 10 millions customers, almost two thirds of the market share in Bangladesh. Actually, a fifth of those customers got in during the last quarter. The estimated value of GrameenPhone is 1.2 billion euros, with Telenor owning approximately 62% of the shares.

The agreement made in 1997 contains a phrase in which Telenor expresses the intention to sell out of the company in the long run. Today Telenor says there was no obligation connected to it. Muhammad Yunus has another opinion, says Telenor is «greedy», and wants Telenor to give up the control over the company. Jon Fredrik Baksaas, CEO of Telenor, points out though that it is remarkable that Muhammad Yunus didn't raise his claim until now: only recently the risk in GrameenPhone was reduced substantially.

I cannot make any judgments on the case at hand, but there is the fact that Telenor is no charity organization and as such would have to explain a thing or two to its shareholders if it were to give away millions of euros to another company. On the other hand, this case shows that Muhammad Yunus is a smart business man who wants to pick up some profit when he gets the opportunity. That's of course no problem, and in fact, I think it's to his credit, but things get a bit different when he tries to use the ceremony of the Nobel Peace Prize to blackmail a business partner. He even wrote a rather threatening letter to Telenor lining out a press release that would have been damaging to the company

A person who certainly isn't afraid to share his opinion with the rest of the world without being properly informed is the former Norwegian Prime Minister Thorbjørn Jagland of the social-democratic Labor Party (Ap). According to him, Telenor had «the moral obligation» to sell its GrameenPhone shares. He recognizes that without Telenor, perhaps there wouldn't have been a GrameenPhone, but it seems that if a Western company just for once does some charity and even can make a profit out of it, the company is morally obliged to renounce that profit. Or in other words, the investment in GrameenPhone never was an investment, but only a donation. Making profit by abusing the Third World is wrong, but making profit on investments in the Third World is wrong too. That is, if you're a Western company, because for exactly the same thing, Muhammad Yunus and Grameen Bank got the Nobel Peace Prize this year.