TRG: Proving Grounds

May 13, 2026 (MLN): Supreme Court of Pakistan has handed a landmark victory to Mr. Ziaullah Khan Chishti, the founder and former CEO of TRG Pakistan Limited (TRG), and the company’s local shareholders, by dismissing appeals that sought to reverse a Sindh High Court’s judgment that deemed acquisition of a 30% stake in the PSX-listed technology company as both fraudulent and oppressive to minority shareholders.

The landmark ruling, via a short order, has highlighted the importance of corporate governance under complex corporate holding structures, built around management control.

The chain of events started on December 10, 2021, post Mr. Chishti’s exit from the company, when TRG International an associate, approved allocation of its own liquid assets to its shareholders; TRG being one such significant shareholder.

Through this allocation, TRG were to receive USD 120 million in cash plus 5.4 million shares of Ibex Limited, a listed NASDAQ company. However, TRG’s Board decided to hand over these assets back to TRG International for “providing direct or indirect value, benefit, and liquidity to the shareholders of” TRG.

In order to achieve that purpose, TRG International moved these liquid assets into its wholly owned subsidiary, Greentree Holdings, which bought TRG’s own shares with these funds.

This circular referential arrangement, a rather contrived buy back arrangement, generated a lot of ire among other shareholders, and led JS Group, a prominent financial services conglomerate, to litigate against TRG and its affiliates. Despite the fact that JS Group had representation on the Board of TRG, it failed to move any needles.

Reprieve only came when Sindh High Court’s judgement, which the current appeals sought to reverse, declared that these shares were unlawfully financed using TRG’s funds, in violation of Section 86(2) of the Companies Act 2017.

Interestingly, TRG International, as per their latest statement on the matter, has been deeming this acquisition of TRG shares as foreign investment into Pakistan. As the matter stood, it in fact was capital repatriation, against management control of TRG.

Nonetheless, when Greentree Holdings edged closer towards the regulatory threshold of 30% ownership in TRG, it announced a Public Announcement of Intention to acquire upto 50% of Free float shares (35% of Outstanding Shares of the Company) in December 2024, once again utilizing funds that belonged to TRG.

Mr. Chishti, who had resigned as CEO roughly three years ago, moved quickly to challenge the tender offer in March 2025. Holding a 16% stake in the company, he alleged that directors of TRG facilitated Greentree Holding’s creeping acquisition using internal funds, bypassing shareholder approval, and regulatory safeguards.

The Sindh High Court agreed. It mandated fresh elections of directors, voided Greentree Holding’s public offer to take over the company, and held that TRG’s shares, ring-fenced by TRG International for the benefit of TRG, were to be considered treasury stock of TRG.

Judgement further held that the fate of this block of shares was to be decided by the new elected Board. The Board could hold this block as Treasury Stock or cancel it, as usually done in a genuine shares buyback transaction.

The Management of TRG Pakistan found this ruling riddled with "irregularities and infirmities" and, alongside Greentree Holdings and TRG International, challenged it in the Supreme Court. Interestingly, Greentree Holdings, a wholly-owned subsidiary of TRG International, was also a litigant in praying to stay TRG’s election of directors.

Anyway, moving onwards, arguments were heard and judgment was reserved by the Supreme Court on February 3, 2026.

On Monday, a three-member bench comprising Justice Naeem Akhter Afghan, Justice Muhammad Shafi Siddiqui, and Justice Miangul Hassan Aurangzeb issued its short order: the appeals are dismissed.

Detailed reasons are to follow yet.

What This Means for Zia Chishti

One implication of Supreme Court’s decision is that Mr. Chishti, as a shareholder, has regained his voting power at TRG, and now stands to emerge as the most influential voice at the company.

TRG International itself acknowledged as much, warning in a press release on Monday that the verdict could produce "a significant shift in voting influence within TRG Pakistan towards Mr. Zia Chishti."

TRG Pakistan holds approximately 45% non-controlling interest in TRG International, meaning Mr. Chishti can effectuate significant changes at TRG International if he could find further support at TRG International’s Board. TRG also holds indirect interest in AI firm Afiniti and Nasdaq-listed customer management company IBEX. These companies were founded by Mr. Chishti himself.

Sensing the potentiality, Management at TRG International is worried, perceiving Mr. Chishti’s return as an existential threat to their control of the business, that could create "serious reputational, governance, commercial, and stakeholder risks”. The obvious reference here is towards sexual harassment allegations against Mr. Chishti.

The Management also said that it has already implemented "multiple layers of governance and structural protections" to shield its portfolio companies from developments at the TRG Pakistan level. Whether Mr. Chishti proves to be a governance or structural threat to the portfolio companies remains to be seen.

The fact remains that Mr. Chishti’s shareholding has been there in TRG and elsewhere since his exit and the current Management has been running the show since then. It appears that at least Mr. Chishti’s shareholding hasn’t proved deleterious to the business so far.

Moreover, Mr. Chishti has not indicated whether he intends to become Chief Executive of TRG or other related entities.

The blunt fact, however, is that a battle of control, using shareholders’ funds, has been lost; despite excellent narrative creation by TRG and TRG International. Mr. Chishti only appealed to the black and white of the Pakistani corporate law.

Mr. Chishti has lost against TRG International in other unrelated cases in United States and elsewhere, and in one such case, a US Judge ordered Mr. Chishti to pay USD 9.1 million to TRG International.

Beyond the battlegrounds of corporate control, the Supreme Court’s decision has enhanced Pakistan’s corporate investment image, highlighting that transparency in decisions taken at the board rooms has far reaching implications.

Interestingly the Sindh High Court’s Order did not cause any injury to either TRG International or to Greentree Holdings; rather it only corrected the lacuna in the ownership structure and voting powers of the block of TRG shares acquired by Greentree Holdings using TRG’s own funds. This block of shares was supposed to be the saving grace for Managements of TRG and TRG International against Mr. Chishti.

In fact, the Court had, as was appropriate, left the fate of these shares in the hands of TRG Pakistan shareholders, to where it actually belonged, and not to the Board of Directors who only collectively held 1% shares in TRG.

It is important to understand that the decision regarding the fate of shares can only be taken by the general body of the shareholders duly convened under an EOGM.

With the full judgment still pending, the final chapter of this case is yet to be written.

For now, Supreme Court has upheld a landmark ruling and upped Pakistan's corporate governance debate a notch.

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