TRG: Wrapping Up Year 2025

October 06, 2025 (MLN): TRG Pakistan published its Annual Accounts for FY2025 today. Surprisingly enough, no AGM notice was appended to the Annual Accounts despite the fact that as per the Company Notice dated July 10, 2025, plaintiffs in Civil Suit No. 1898 of 2025 had unconditionally withdrawn their suit.

To recall, the said suit was filed on October 24, 2022, to restrain TRG from holding AGM, as part of a prolonged legal battle arising from the controversial acquisition of TRG shares by Greentree Holdings Limited with funds ringfenced for TRG’s shareholders.

Greentree Holdings Limited, a related party, is a wholly owned subsidiary of The Resource Group International Limited; an associate with 68.8% shareholding and 100% effective beneficial interest.

The Directors’ Report does not inform the shareholders as to why the AGM is not being held either. Notably, the financial statements for the last 4 years remain unadopted.

Ironically, the current Board’s term has also ended on 14th January, 2025.

The Directors’ Report does discuss a sizable sale, in November 2024, of IBEX shares at USD 19.65/- to IBEX Limited. This “sizable monetization” rather proved to be unfortunate for TRG as the IBEX shares now trade for USD 40.73/- on Nasdaq, implying an opportunity loss of USD 75 Million on 3.56 million shares sold.

The shares were sold by TRG International to fund the Greentree public offer, which was subsequently declared illegal by the Sindh High Court.

As a result, those funds are in a state of limbo while TRG Pakistan shareholders lost out on a substantial increase in Ibex share value.

The other important event during the year was the financial restructuring and recapitalization of Afiniti Ltd., whereby TRG, through TRG International, had to relinquish control of Afiniti to its senior lenders and further subscribe to Afiniti’s convertible debt to keep a part of its earlier economic interest intact, in percentage terms.

Despite TRG International using funds belonging to TRG Pakistan to invest in Afiniti, on behalf of all TRG International shareholders, it appears this has not led to any change of voting control or increased shareholding for TRG.

Interestingly, TRG’s share of profit for the year in its equity accounted investee TRG International was PKR 5.3 billion.

However, TRG lost an almost equal amount via investment in its own shares held by Greentree Holdings Limited.

Fighting various court battles tooth and nail, the Management’s attempt to control the Company via Greentree Holdings Limited using TRG’s own funds, proved to be a rather tough nut, despite deploying a very effective narrative throughout.

To recall, as per Sindh High Court’s ruling dated 26 June, 2025, the act of transferring own resources to a related party, Greentree Holdings, to acquire TRG shares was an unlawful act under Section 86(2) of the Companies Act 2017.

This ruling also stopped Greentree Holdings Limited from pursuing its tender offer for TRG shares, once again, with TRG’s own funds, likely sourced from ill-timed sale of IBEX shares. The Court’s decision also mandates fresh elections for TRG Pakistan’s Board of Directors.

The financial statements also mention (Note 26.1) that “If this were to occur (i.e., declaration of TRG shares to be held as a treasury stock and to retain these treasury shares, cancel them or sell them) there would be a derecognition of investment in the Company in the books of GTH and a corresponding reduction in equity of the Company by around Rs. 9.2billion”.

TRG, Greentree Holdings and other parties have filed an appeal against this ruling in the Supreme Court.

Entangled at various fronts, the Management, it appears, has lost interest in corporate governance, choosing not to carry out the annual evaluation of its Boards’ performance, Members of the Board and its Committees.

The plea taken by the Management is rather contrived: to defer Board’s evaluation since certain directors are involved in ongoing litigation proceedings.

Ironically, the Listed Companies (Code of Corporate Governance) Regulations, 2019 has no such proviso for deferring the Board’s assessment and evaluation.  

The Directors report also includes newly added text regarding the Directors remuneration.

Interestingly it also states that three board members, namely Mohammad Khaishgi, John Leone and the CEO Hasnain Aslam have waived directors’ fees. As CEO Hasnain Aslam has also waived executive compensation since he became a director and CEO in December 2021.

This has already been questioned by shareholders in the past who have questioned whether the CEO is aligned with the Company given he has chosen to be paid by TRG International instead.

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