Court Clips TRG Wings

June 20, 2025 (MLN): In a landmark ruling, the Sindh High Court has blocked the attempted takeover of TRG Pakistan Limited by Bermuda-based Greentree Holdings, declaring that the shares acquired by Greentree, nearly 30% of TRG’s stock, were unlawfully financed using TRG’s funds, in violation of Section 86(2) of the Companies Act 2017.

Justice Adnan Iqbal Chaudhry concluded that the directors of TRG Pakistan allowed company assets to be funnelled through offshore affiliates TRGIL and Greentree for acquiring TRG’s shares, a move deemed both fraudulent and oppressive to minority shareholders.

The Court ruled that such financial assistance undermined corporate governance, violated fiduciary duties, and aimed to transfer control of the company unfairly.

The ruling stems from a petition filed by TRG’s founder and 16% stakeholder, Muhammad Ziaullah Khan Chishti, who alleged that directors of TRG facilitated Greentree’s creeping acquisition using internal funds, bypassing shareholder approval and regulatory safeguards.

The Court agreed, declaring all shares held by Greentree to be treasury shares of TRG Pakistan and ordered their removal from Greentree’s control.

The decision also mandates fresh elections for TRG Pakistan’s board of directors and voids Greentree’s ongoing public offer to take over the company.

The manager of the offer, AKD Securities, has been directed to return tendered shares to shareholders.

The Court observed that TRG’s directors, holding less than 1% of the company themselves, violated Sections 86(2) and 158(2) of the Companies Act and manipulated corporate affairs to entrench their control.

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