IHC suspends PSL director elections, stays transfer of controlling interest

December 04, 2025 (MLN): The Islamabad High Court (IHC) has suspended the upcoming election of directors of Pakistan Services Limited (PSX: PSEL) and issued a stay order against the transfer of a controlling 56% shareholding in the company, following a petition filed by Murtaza Hashwani alleging illegal transfer of shares.

The company, which owns and operates the Pearl-Continental (PC) Hotels chain, communicated the material information to the Pakistan Stock Exchange (PSX) today.

According to the court order dated November 28, 2025, the IHC has suspended all notices issued by Thatta Cement Company Limited which demanded a fresh election of directors.

Consequently, the PSL Board’s decision to convene an Extraordinary General Meeting (EOGM) on January 06, 2026, for the fresh election of directors under Section 162 of the Companies Act, 2017, has also been suspended until further orders.

A Rs3.6bn loan and alleged breach

The stay order stems from a petition filed by Murtaza Hashwani and five others against the Securities & Exchange Commission of Pakistan (SECP), Thatta Cement, and other respondents.

Murtaza Hashwani, claiming to be the lawful owner of the 56% shareholding in PSL, alleged that these shares were illegally and fraudulently acquired by the respondents.

The petition details that on July 11, 2025, Hashwani entered into a Share Repurchase Agreement (SRA).

Under this agreement, over 5.2 million shares were transferred as security against a loan of Rs3.638 billion.

The petitioners contend that the SRA explicitly prohibited the sale or disposal of these shares to any third party.

However, they allege that just three days after signing the agreement, the shares were transferred to other parties (specifically a 27.95% stake to Respondents 5 and 6) in violation of the Companies Act, 2017 and the Securities Act, 2015.

In its interim order, the IHC has restrained the respondents from transferring, selling, or assigning the 56% stake in PSL to any third party. They are further restrained from interfering with the management or affairs of PSL.

The court noted that the petitioners have challenged the failure of regulatory authorities, including the SECP, the Competition Commission of Pakistan (CCP), and the PSX, to prevent these alleged violations.

Notices have been issued to the respondents to submit their comments within a fortnight. The court has relisted the matter for hearing on December 23, 2025.