Defamation case filed by TRG ex-CEO: SHC suspends warrants issued for directors

KARACHI: The Sindh High Court (SHC) recently suspended bailable warrants earlier issued by a district and sessions court against various individuals, including some members of the TRG Pakistan’s board of directors, in a defamation case filed by former chief executive officer (CEO) of the organisation Zia Chishti.

In a statement issued by the TRG Pakistan to the Pakistan Stock Exchange (PSX) on February 23, the TRG Pakistan provided links to the website of the United States Congress that contains details of an arbitration related to Chishti’s claims as a basis for his defamation suit.

The TRG Pakistan stated that the former CEO left the organisation in November 2021 after an ex-employee of Afiniti, a TRG portfolio company, testified in a US Congressional hearing that an arbitrator had issued an award against him for sexual harassment and assault, leading to a global outcry and subsequent resignation of Chishti from all positions at the TRG and its portfolio companies.

The statement read that in December 2022, following a defamation claim by Chishti against the ex-employee, the US Congress released the full text of the award against him, which included payment by of damages amounting to $5 million to the ex-employee, and findings of non-consensual assault and infliction of emotional distress.

The TRG Pakistan stated that since his departure from the organisation, the former CEO made repeated attempts for a comeback, but the company’s management repeatedly thwarted his attempts to do so as they believed that the severity of his actions did not allow him any association with the TRG and his comeback would cause a massive value destruction.

The organisation maintained that after the failure to come back, the former CEO started engaging in vengeful actions, including creating a company in Pakistan to market a product competitive to Afiniti’s to the Chinese market, for which Afiniti sued him in the US for intellectual property theft. The statement read that the defamation lawsuit against TRG directors was part of same efforts by Chishti.

In the application filed by the TRG’s directors with the SHC, the applicants argued that the basis of the alleged defamation was a private inter-company letter that was not circulated.

The applicants also argued that the contents of the letter were based on publicly available information consistent with the arbitration award.

The applicants asked for dismissal of the cognizance order by the district and sessions court. The SHC dismissed the warrants and the suit would be next heard on March 20.

The TRG is the largest technology exporter of Pakistan, with nearly $100 million in annual exports and 8,000 employees in the country. The organisation stated that the timing of vengeful actions against its directors, a majority of whom were US citizens, was unfortunate especially when the country was negotiating a new Trade and Investment Framework Agreement (TIFA) with the US.