Bailable arrest warrants issued for TRG International management team

KARACHI: A District & Sessions Judge in Karachi has ordered issuance of bailable arrest warrants for various individuals associated with The Resource Group International Limited.

The arrest warrants come after the judge took cognizance in a criminal defamation suit filed by complainant Zia Chishti, the founder of TRG Group.

The accused comprise of board of directors and senior management at the TRG International. These include Mohammad Khaishgi (CEO and Chairman of TRG International and Chairman of TRG Pakistan), Hasnain Aslam (Director TRG International and CEO of TRG Pakistan), Pat Costello (General Counsel TRG International), Hassan Farooq (Group Director Finance TRG International).

Other accused persons include TRG International Directors John Leone, Patrick McGinnis, Waleed Tariq Saigol, Zafar Iqbal Sobani and Khaldoon Bin Latif.

The next hearing in the criminal complaint proceedings is scheduled for March 8 next month. The majority of the accused are based in US and UK, and it remains to be seen whether these accused persons will attend the proceedings to clear their name in the Pakistani courts.

Counsel for various accused persons had filed an application in the Sindh High Court seeking dismissal of the criminal complaint. However, after this unsuccessful application, the counsel submitted a detailed reply with the District & Sessions court seeking dismissal of the criminal complaint which also did not bear any fruit.

The criminal complaint is the latest part of a power struggle between former colleagues and the founding members of the TRG Group which include Zia Chishti, Mohammed Khaishgi and Hasnain Aslam. In November 2021, Zia Chishti stepped down from various roles in TRG and its portfolio companies on the back of media reports of an arbitration award against him during his time at Afiniti.

Zia Chishti’s resignation left a power vacuum at TRG Pakistan and TRG International which led to a power struggle to gain control over one of Pakistan’s most successful technology companies.

Last year, a complaint was filed by a director of TRG Pakistan, highlighting a number of legal violations by the company and its management team to gain control at the expense of thousands of shareholders. This complaint to the Securities & Exchange Commission of Pakistan highlighted how cash and assets that belonged to TRG Pakistan’s public shareholders were illegally withheld and used to acquire voting control in TRG Pakistan in contravention of Pakistani law.

TRG International has been accused of illegally withholding the funds due to shareholders to acquire a substantial shareholding in TRG Pakistan through an entity named Greentree Holdings Limited domiciled in the tax haven of Bermuda.

Greentree has utilised a substantial portion of $120 million of cash due to TRG Pakistan to acquire a 28.5pc shareholding in the company. Greentree is currently the largest shareholder in TRG Pakistan. Greentree’s board of directors comprise of Syed Muhammad Shabbar Zaidi, Ali Ahsan, Ahmed Pervaiz and Ameer Qureshi.

In addition to the above, TRG Pakistan was also due its portion of the shareholding in Ibex Limited, a Nasdaq listed entity. TRG Pakistan had publicly disclosed this asset would also be held through Greentree Holdings Limited. However, in a disclosure made in November 2022, TRG Pakistan confirmed the shareholding is being maintained through TRG International instead, which is a violation of the commitment made to TRG Pakistan’s shareholders.

The SECP had issued show-cause notices to TRG Pakistan for a number of violations, based on the complaint by its director. TRG Pakistan has secured an injunction through the Sindh High Court against the SECP and the matter is now pending in the court.