TRG takeover battle: Zia Chishti lands favourable SHC ruling amid mounting financial pressure
The tender was to remit up to $53 million to Pakistani shareholders of TRG Pakistan, and had been placed on hold pending the hearing of the petition.
SHC restrains Zia Chishti, wife from transferring shares of TRG Pakistan: notice
The judge ruled that the company violated Section 286 of the Companies Act relating to shareholder oppression and that such oppression took place with the purchase of shares of TRG Pakistan Limited by Greentree Holdings.
The judge has ordered the abatement of the Greentree Holdings tender, the conversion of the shares held by Greentree Holdings into treasury shares of TRG Pakistan and the holding of Company elections.
A successful completion of the tender would have accorded control of the company to Greentree Holdings, in addition to providing an exit to company shareholders.
In a notice to the PSX issued today, the company has stated that the judge's order contains 'various irregularities and infirmities' and is 'assessing legal options, including challenging the decision by filing an appeal before the Honourable Supreme Court of Pakistan'.
Market analysts believe that the company will appeal the ruling.
Market observers expressed disappointment at the ruling of the Sindh High Court, as the tender provided shareholders an opportunity to lock in a near 40% premium to the current share price.
The company's share price responded negatively to the news of the ruling, dropping 12% on the prospect of a lack of clarity on the company's future.
Since late 2021, the company has been mired in a takeover battle between Chishti and his allies and the current management of TRG.
Chishti resigned as CEO of the company following disclosure in US Congressional testimony of an arbitration award against him for sexual harassment and assault of an ex-employee, in which he had to pay the former employee over $5 million in damages.
TRG's management has held that any association of Chishti with the company would be fatally damaging to the Company's assets given his reputation.
Since his exit from the company, Chishti has filed several defamation suits relating to his sexual misconduct award.
US arbitrator orders Zia Chishti to pay $9.1mn to TRG International
In the United States, he sued the former employee for defamation but was dismissed by a US judge.
In the United Kingdom, Chishti sued The Telegraph for carrying an article that he deemed defamatory, and settled with the newspaper in March 2025 with The Telegraph providing an apology.
Meanwhile, in Pakistan, Chishti sued the board and management of TRG for defamation for referring to his arbitration award in court filings; those proceedings have been suspended by order of the Supreme Court.
Chishti's court victory comes against the backdrop of severe creditor pressure on him.
In January 2025, he lost an arbitration filed against him by TRG International for pledging his shares in TRG Pakistan for a loan extended to him by JS Bank, apparently for the purpose of building up his shareholding in the Company.
In its notice today, TRG has informed that this arbitration award, which included a $9 million payment order against him, has been confirmed for collection by a United States Federal judge.
In addition, in January 2025, Chishti defaulted on the above-mentioned Rs3 billion loan from JS Bank, which has attempted to seize his shares in the Company as collateral but has been prevented from doing so by several stay orders relating to the arbitration award enforcement.
Chishti's financial woes are further complicated by the recent disclosure of a tax lien of $10 million placed on Chishti's assets by the United States Internal Revenue Service, for unpaid United States federal taxes.
Industry observers have expressed dismay at the continuing upheaval within the country's leading technology player, especially since the tender was set to provide clarity to the future of the company.
With the recent ruling, the battle seems likely to continue.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
12 hours ago
- Business Recorder
Jubilee Spinning & Weaving Mills says soon to receive NOC from NBP to change company name
Jubilee Spinning & Weaving Mills Limited announced on Monday that it was in the process of soon receiving No Objection Certificate (NOC) from the National Bank of Pakistan (NBP) in order to change the name of the company. The company shared the development to the Pakistan Stock Exchange today. It said that getting the NOC was the only remaining requirement for the approval of Form-26 related to change of company name. 'As soon as we receive the NOC from NBP, we will submit the same to the SECP and then apply for Certified True Copy of Memorandum of Association to the SECP.' Further progress report will be submitted to you within 15th day of every quarter ended as per requirement of the listing regulations of the Exchange, read the notice to the bourse. Jubilee Spinning & Weaving Mills Limited was incorporated in Pakistan as a public limited company on 12 December 1973 under the Companies Act, 1913 (Now the Companies Act, 2017). The principal objective of the company is to engage in the business of manufacturing and selling of yarn, buying, selling and otherwise dealing in yarn and raw cotton.
Express Tribune
16 hours ago
- Express Tribune
Victory celebration and reality check
Listen to article Pakistani luck is flying these days. It has been blessed with massive success, one after the other. First, Pakistan successfully and comprehensively defeated India in the military conflict. It was an enormous triumph, which laid the foundation for a regional reset. India, which had portrayed itself as the regional power, a rising market and economy in Asia, and a leader of the Global South, had to face a checkmate at the hands of Pakistan. Second, on the diplomatic front, Pakistan achieved many accomplishments. After the war, India sent a delegation to the world to launch a propaganda campaign. It wanted to tag Pakistan with terrorism. Pakistan analysed the situation and sent its own delegation, which outperformed the Indian delegation. The world did not buy the Indian argument, and the Pakistani point of view had wider acceptance. Pakistan maintains a balanced relationship with the world's major powers, including China, the United States, and Russia. There is no need to discuss the China-Pakistan relationship, as everyone is aware that both countries share a deep and enduring brotherhood. However, the recent shift in the Pakistan-US relationship is the talk of the town. The US played a prominent role in halting the war between India and Pakistan. After the truce, President Trump praised Pakistan for its sensible and rational behaviour. He also invited Army Chief General Asim Munir for a meeting at the White House. Both sides reportedly discussed enhancing the relationship in multiple fields. On the other hand, Pakistan and Russia intensified efforts to further enhance and strengthen their bilateral relationship. Russia has shown interest in investing more than $2 billion in reviving and expanding Pakistan Steel Mills. It is a good omen, as Pakistan was looking for opportunities to revive the mill. Also, a breakthrough happened at the SCO defence ministers' meeting, where Russia supported Pakistan's stance on terrorism. Simultaneously, Pakistan played a prominent and leading role in ending the Iran-Israel war. It diligently convinced the US administration that the war in the region had no justification. Therefore, all efforts must be made to end the war and work for peace. These examples collectively indicate that Pakistan has achieved significant success in recent months. However, the country needs to be cognizant that these achievements cannot be sustained without solving domestic challenges. Pakistan continues to face multiple challenges. The economic and governance system is in shambles. The government claims that the economy is improving and that the budget will provide a foundation for accelerated economic growth and development, as promised the previous year. But the Economic Survey 2024-25 and the budget for 2025-26 present a bleak picture. The Economic Survey shows that the national GDP grew at a 2.7% rate. However, independent sources are not willing to accept government claims and instead raise questions. They question that, during the first three quarters of FY25, the economy grew at an average annual rate of 1.7%. To achieve a yearly rate of 2.7%, the economy would have had to grow at 5.3% during the last quarter, which is not possible. Apart from that, agriculture, which had provided a significant boost to economic growth in FY24, presented a dismal picture in FY25. A booming sector experienced a sharp decline in production and market share. The growth rate fell to 0.56% in FY25 from 6.25% in FY24, driven by a steep fall in the growth of major crops. Major crops' growth rate fell to -13.26% in 2025, from 11.3% in 2024. Similarly, the large-scale industry is struggling to enter a positive growth trajectory, having demonstrated a negative growth of -1.7%. Social indicators too are pretty disturbing. The World Bank estimates that 44.7% of the population lives below the poverty line, and 16.5% of the population resides in extreme poverty. Poverty is increasing, despite the government's assertions of investing in poverty reduction such as the Benazir Income Support Programme (BISP). This raises questions about the effectiveness and sustainability of the BISP. Food insecurity is another constant irritant, and a 2013 study estimated that 58.8% of the population in Pakistan was food insecure. Unfortunately, we have to rely on old data because the government has not updated it. There are fears that food insecurity has increased over the years due to multiple factors. Poor economic conditions and the devaluation of the PKR have substantially impacted people's purchasing power, resulting in fewer resources available to afford healthy food. Additionally, inadequate governance and management of the agricultural sector have led to lower production and reduced availability of quality food. Bad governance is further complicating the situation. The elite class has designed the institutions to ensure the exclusion of common citizens from the governance system without explicitly mentioning it. The system encourages wealth accumulation, and there is no system in place for redistributing wealth or resources. It is deepening the divide between the haves and have-nots. A few influential individuals have all the resources, while millions struggle to make a decent living. Furthermore, the elite have devised an extremely complex business system and environment to strengthen their control over the economic system and resources. This system has given birth to rampant corruption and deep-rooted rent-seeking behaviour. It only works for the powerful or those who can afford to offer bribes. Environmental degradation, particularly climate change, is another issue that is worsening over time. Climate change-related disasters, such as floods and droughts, are regular visitors. Pakistan is still struggling to recover from the impacts of the 2022 floods, and there is a prediction that Pakistan will again face floods. On the other hand, climate change is severely impacting agriculture, which is threatening Pakistan's food security and economy. Farmers are bearing the brunt of climate change. Poor governance and attitude of the government have left farmers vulnerable to the impacts of climate change. In conclusion, Pakistan needs to be mindful that its heyday can be limited if it does not address these issues. The writer is a political economist and a visiting research fellow at Hebei University, China
Express Tribune
16 hours ago
- Express Tribune
Why global giants pulling out
Listen to article The announcement in July 2025 that Microsoft had closed its local office in Pakistan after 25 years sent ripples through a country already struggling to attract foreign investment. The tech giant, which had established its Pakistani presence in the early 2000s and had since played a vital role in licensing, software partnerships, and capacity building, quietly wound down operations and laid off its remaining staff. While Microsoft stated the move was part of a broader global restructuring towards artificial intelligence and regional consolidation, the local business community viewed the decision as a reflection of Pakistan's deteriorating appeal for international firms. But Microsoft's exit is not an isolated case. It is part of a broader trend involving more than two dozen multinational companies (MNCs) that have either exited or substantially scaled down operations in Pakistan over the last three years. These include some of the world's most recognised names across sectors – Shell, Procter & Gamble, Lotte, Siemens Energy, Unilever's Lipton division, and Reckitt Benckiser's health portfolio among them. This steady outflow represents a serious challenge to Pakistan's economic narrative and its efforts to attract and retain foreign direct investment. These multinationals were more than just sources of foreign capital – they introduced global standards in corporate governance, technology, and management. Their presence helped modernise local industries and provided the Pakistani workforce with valuable exposure to international business practices, enhancing skills and integrating local talent into global professional networks. In fact, many executives currently serving in the C-suites and boards of local companies began their professional development within these global firms, where they gained the skills, training, and exposure that prepared them for leadership roles. So, this exodus represents not only a loss of investment but also a setback to institutional learning and workforce development. One of the major contributing factors behind this trend has been the persistent depreciation of the Pakistani rupee, which has lost over 50% of its value since 2021. For foreign companies reporting earnings in their home currencies, the sharp devaluation has rendered local operations financially unviable. Equally critical are the severe restrictions on profit repatriation. Due to Pakistan's chronic balance-of-payments crisis, the State Bank of Pakistan (SBP) imposed strict capital controls that prevented companies from sending profits abroad. At its peak in 2023, over $1 billion in blocked dividends were awaiting clearance, forcing some companies to absorb mounting currency losses on their balance sheets. This fiscal fragility is compounded by an unpredictable policy environment. Political instability, frequent changes in taxation policy, arbitrary regulatory enforcement, and minimal stakeholder engagement have all undermined business confidence. Foreign investors have frequently cited the absence of a consistent economic direction and the growing influence of non-elected institutions in economic decision-making as major deterrents. In some cases, companies reported being blindsided by retrospective tax demands or abrupt changes in import rules, disrupting years of business planning and operations. The government's decision to implement sweeping import restrictions in 2022-2024 in an effort to conserve foreign exchange reserves proved especially damaging. These restrictions severely impacted firms dependent on imported raw materials and machinery. Entire production lines were halted for weeks or even months, with companies unable to procure the necessary inputs. Local assemblers in the automobile sector and multinational consumer goods manufacturers were among the hardest hit. The inability to meet market demand, maintain brand standards, or even retain employment levels pushed many companies to re-evaluate their long-term presence in Pakistan. The consumer market, once considered a growth engine for MNCs in Pakistan, has also weakened. Persistent inflation, which remained above 25% for much of 2023, eroded household purchasing power. The middle class, which had fuelled expansion in sectors like fast-moving consumer goods, health, and retail, saw their consumption shrink dramatically. As a result, demand for higher-end or branded products collapsed, leaving many multinational portfolios unable to meet volume targets necessary for sustainable operations. Further compounding the problem are operational inefficiencies tied to infrastructure and energy. Despite increased electricity generation capacity, power distribution remains unreliable and expensive. Load shedding, inconsistent gas supply, and high industrial tariffs have significantly raised the cost of doing business. Many manufacturing operations have had to rely on backup power generation, adding further to their expenses and reducing competitiveness compared to regional peers. Externally, shifts in global investment flows have not favoured Pakistan. In the aftermath of the Covid-19 pandemic, multinational corporations have increasingly turned to markets offering more regulatory certainty, proximity to supply chains, and lower operational risk. Countries like Vietnam, India, Bangladesh, and Mexico have benefited from this realignment. Pakistan, in contrast, continues to grapple with geopolitical risks, compliance issues with international financial institutions, and governance concerns. The perception of being a volatile and high-risk jurisdiction has driven many boardrooms to favour exit over perseverance. As stated by the SBP, the cumulative effect of these exits is significant. Foreign direct investment fell to a mere $1.2 billion in FY2023, the lowest in over a decade. The country not only loses capital inflow, jobs, and technology transfer, but also suffers a reputational blow. It becomes harder to attract new investors when existing players are heading for the exit. The departure of long-term multinationals like Shell and Siemens, who had operated in Pakistan for decades, sends a particularly discouraging signal to potential entrants. The growing exodus of MNCs from Pakistan casts a long shadow over the government's initiatives to promote the country's image as an attractive destination for foreign investment. Chief among these is the establishment of the Special Investment Facilitation Council (SIFC), launched with the aim of streamlining approvals, accelerating project timelines, and showcasing Pakistan as an investment-ready destination. While the SIFC has been positioned as a one-window solution to attract foreign capital in sectors such as agriculture, energy, and IT, the sustained flight of established global firms sends a contradictory message to the international business community. The perception that existing investors are being neglected or obstructed undercuts the credibility of new investment outreach. Restoring Pakistan's credibility as an investment destination requires urgent and targeted reforms. A stable macroeconomic framework, unambiguous profit repatriation policies, and transparent regulatory mechanisms are essential. Structural reforms in taxation, energy pricing, and trade policy must be implemented to lower the cost of doing business. Beyond economics, the state must ensure political and legal stability to reassure global investors that their capital will be protected and allowed to grow. THE WRITER IS A FINANCIAL MARKET ENTHUSIAST AND IS ASSOCIATED WITH PAKISTAN'S STOCKS, COMMODITIES AND EMERGING TECHNOLOGY
