TRG: Dominos Tumbling for the Management

June 30, 2025 (MLN): In the ongoing litigation battle between the TRG Management and certain shareholders, the honorable Islamabad High Court has also lent its weight to the complaining shareholder(s), directing SECP to invoke its powers under Section 147 and to call an EOGM of the Company to conduct Elections of Directors.

The Honorable High Court also appointed Mr. Muhammad Fahad Khattak Advocate as Commission to oversee and ensure compliance with its directions. The Court has also mandated the Commission to submit a comprehensive report, every fifteen days, till the conclusion of the election process.

To facilitate the Commission, the Court directed everyone concerned, including SECP, to extend full and unqualified cooperation to the Commission to discharge its duties.

Interestingly, the Order Sheet stated that the SECP, despite empowered to direct the Company to call an EOGM kept on maintaining that “it is only empowered to direct the Company to hold the meeting and not to call the meeting itself, is misconceived”.

This is indeed strange in a country where everyone is hungry for power, except SECP!

The judgement states that the SECP, under Section 147 of Companies Act 2017, had the powers to “not only direct the calling of a meeting but also, where circumstances so warrant, to call the meeting itself and to issue such ancillary or consequential directions as may be necessary for the proper conduct of the meeting.”

Being Islamabad High Court, the judgement also clarified that the petitioner, a shareholder holding 55,00 shares, does not seek a direction against the Company or the Registrar under that provision [Section 158 of the Companies Act 2017] … Rather, the Petitioner seeks enforcement of the SECP’s statutory duties under Section 147.”; establishing clear jurisdiction of the Court, hence.

In an earlier landmark judgement against the Company’s Management, the Sindh High Court also ruled against the Management. The lengthy judgement recounting various technicalities, passed orders on various finer points, including the Elections of Directors. The present judgement is rather laser sharp on the singular issue raised by the petitioner.

The Management in its Notice dated June 23, 2025, maintained that the ruling of the Sindh High Court had “multiple irregularities and infirmities” and has appealed to the Supreme Court instantly, due to the sensitivity of the matter; the sensitivity being that if Elections are called in the light of the Sindh High Court’s judgement, the present Management shall lose control of the Company and shall also face a sky-high wave of litigations for injury, unlawful acts, and damages; not only in Pakistan but also in USA as well.

Let us wait for the Management’s response against the present Islamabad High Court’s judgement. We believe that the Management, in its earnest, shall also find this ruling rather irregular and infirm.

After all, instances of rigorous enforcement of corporate law in Pakistan are rather few and far between.    

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