KARACHI: TRG Pakistan Ltd seems to have forestalled yet another alleged attempt at a hostile takeover by its former CEO and co-founder and a number of financial institutions.

The IT company told shareholders on Monday that the Sindh High Court passed an interim order on Jan 7 that restrains JS Bank Ltd, JS Global Capital Ltd, Bank AL Habib Ltd and DJM Securities Ltd from “creating any third-party interest” in relation to the company’s shares pledged by ex-CEO Zia Chishti and his wife Sarah Jennifer Pobereskin with them till the next hearing.

TRG Pakistan has been trying for months to stop its former CEO and co-founder from taking over the board of directors with the help of a number of financial institutions that control small shareholdings in the IT firm.

The company believes the “lending arrangements” that Mr Chishti and his wife have made with the financial institutions violate the stock purchase agreement, which places restrictions on any transfer or encumbrance on the shares of TRG Pakistan that he owns directly or through his wife.

The latest pre-emptive move by TRG Pakistan follows the foiling of another alleged hostile takeover attempt in October 2022. TRG Pakistan mounted a legal battle against the companies belonging to the JS Group as well as other entities and individuals that the IT firm believed were “acting in concert” with Mr Chishti to take over the board. The SHC at that time had restrained the companies and individuals from taking the benefit of the voting shares that they’d acquired in excess of 30 per cent.

The IT company asserted that these parties violated the provisions of the Securities Act 2015, as they acquired shareholding in excess of 30pc without making a mandatory public offer.

The IT juggernaut that generates over $100 million in foreign exchange annually became the global focus of attention in 2021 for the alleged misconduct of its co-founder and then CEO. Mr Chishti resigned on Nov 29, 2021, after an employee of a TRG Pakistan Ltd-related company testified before a committee of the US Congress that he sexually assaulted her during a business trip.

The power play took a nasty turn in the extraordinary general meeting of the company in January 2022 when Mr Chishti joined hands with the JS Group-affiliated firms to make a comeback and retake control of the board of directors. Mr Zia and his wife controlled roughly 20pc shareholding while the JS Group-related companies held a collective stake of about 14pc in TRG Pakistan.

But all the other shareholders, including foreign ones, decided to band together and collectively thwart the former CEO’s attempt to regain control of the board. JS Group-backed candidates won three seats while the rest of the seven seats went to the other group of shareholders.

The annual general meeting of TRG Pakistan was to take place on Oct 25, 2022, but it was postponed “subject to further orders” from the SHC. The company’s share price lost 6.1pc value to reach Rs109.09 apiece on Monday.

Published in Dawn, January 10th, 2023