Bangladesh Court Rules Yunus-Founded Charity Isn’t a Shareholder in Grameenphone Deal, Upholding €48.5 million Tax Claim

Bangladesh’s High Court has ruled that Grameen Kalyan, a charity founded by Nobel laureate Muhammad Yunus, never held shares in Grameenphone Ltd. and so can’t treat it’s profit share from the mobile operator as tax-advantaged dividend income. The decision backs a roughly 6.7 billion taka (€48.5 million) tax demand from the National Board of Revenue.

The full text of two judgments finds that Grameen Telecom, not Grameen Kalyan, is the shareholder entitled to Grameenphone’s dividends. It reclassifies Grameen Kalyan’s 42.65% share of the proceeds as “income from other sources,” taxable at the regular rate.

Grameenphone Ltd. is majority-owned by Telenor (55.8%), with Grameen Telecom (34.2%) as the second major shareholder and about 10% held by the public. As of 7 October 2026, Grameenphone’s market cap was roughly €2.35 billion or about BDT 324 billion, with the share price at BDT 242.60 on the Dhaka Stock Exchange.

The agreement

At the centre is a registered Equity Participation Agreement dated April 13, 2011. Under it, Grameen Kalyan transferred about 532.6 million taka to Grameen Telecom for a joint investment in Grameenphone shares, with profits split 57.35% to Grameen Telecom and 42.65% to Grameen Kalyan.

Justice Md. Mozibur Rahman Miah, writing for a bench that included Justice Rezaul Karim, pointed to a clause in the agreement barring Grameen Kalyan from ever claiming Grameenphone shares from Grameen Telecom. Because the Income Tax Ordinance 1984 defines dividend by reference to distributions to shareholders, he wrote, money received by a non-shareholder “can in no way” qualify. The judgments rest on the agreement’s terms and the statute; as published, they don’t cite Grameenphone’s share register, which may serve further clarification about the ownership of the shares in question and dividend paid for.

The tax difference

The state argued that classification matters because dividends carry a lower rate than other income. Its counsel put the two rates at 20% and 37.5%. It also said tax Grameen Telecom withheld on the dividend can’t be credited to Grameen Kalyan.

The demand covers assessment years 2012-13 to 2016-17. State counsel gave the yearly amounts as 1.89 billion, 1.33 billion, 1.14 billion, 1.15 billion and 1.16 billion taka. The judgments don’t say whether any interest or penalty is included.

Grameen Kalyan’s case

Grameen Kalyan argued the arrangement was a joint investment made under the Ordinance, that its share keeps its character as dividend, and that tax was withheld at source, so taxing it again amounts to double taxation. It also noted that the tax department had accepted its returns for years. The court found no illegality in the tax office’s decision to reopen the assessments, and held the revision was not maintainable because Grameen Kalyan hadn’t paid the undisputed tax first. The judgments don’t analyse the provision of the Ordinance under which Grameen Kalyan says the agreement was made. Grameen Kalyan says it was made under a provision of the Income Tax Ordinance 1984, cited as section 2(20)(bb).

It sits inside the definition of “company” in section 2(20) and reads as “Company” means a company as defined in the Companies Act, 1913 or the Companies Act, 1994 and includes- …
(bb) an association or combination of persons, called by whatever name, if any of such persons is a company as defined in the Companies Act, 1913 or the Companies Act, 1994;

So the clause treats any association or combination of persons, under any name, as a “company” for income tax purposes if at least one of its members is a company.

Why Grameen Kalyan likely cited it: This is my inference, because the judgments only record that the agreement was made “in pursuance of” the clause. Both Grameen Kalyan and Grameen Telecom are companies, so Grameen Kalyan could argue the joint investment is a “company” under the Ordinance. It could then argue that the 42.65% share is a distribution to a participant of that deemed company, which would be dividend under section 2(26). The court’s reasoning treats the matter only as a contract between two separate parties, with Grameen Telecom as sole shareholder.

The court called the long-running dispute “a classic case of evading taxes” and ordered the stay on the demand lifted, directing the tax authorities to collect the money. Grameen Kalyan’s lawyers say they will seek leave to appeal to the Appellate Division. A chamber judge has already deleted its earlier stay applications from the cause list, leaving the High Court order in force for now.

A long road

Grameen Kalyan filed its petitions in 2017. A 2023 High Court ruling was set aside by the Appellate Division in March 2024. A bench orally discharged the rule in August 2024 but recalled that ruling after noting one judge had earlier appeared for the government in the case. A new bench heard the matter this year.

-: END :-