KARACHI: TRG Pakistan Ltd has mounted a legal battle against an alleged attempt at hostile takeover by companies belonging to the JS Group as well as other entities and individuals that the IT firm believes are “acting in concert”.

A regulatory filing by the company on Tuesday contained an interim order by the Sindh High Court (SHC) dated Oct 19, restraining the companies and individuals from taking the benefit — or acting in pursuance — of the voting shares that they’ve acquired of over 30 per cent until the next date of hearing.

“The company believes that these parties have violated the provisions of the Securities Act 2015, as they had acquired a shareholding of over 30pc in the company without making a mandatory public offer under the relevant provisions of the Securities Act 2015,” it said.

Speaking to Dawn on condition of anonymity, a securities analyst said the pre-emptive move by TRG Pakistan is aimed at preventing the company’s former CEO and co-founder Muhammad Ziaullah Khan Chishti from taking over the company’s board with the help of the JS Group.

The IT juggernaut that generates over $100 million in foreign exchange annually became the global focus of attention last year for the alleged misconduct of its co-founder and then CEO. Mr Chishti resigned on Nov 29 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 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, but it was postponed “subject to further orders” from the SHC. The company’s share price lost 7.5pc value, which is the maximum drop possible in a day, to Rs118.67 apiece on Tuesday.

A representative of TRG Pakistan refused to comment, saying the matter was sub judice. The CEO of JS Bank Ltd, which owned 4.5pc shares in TRG Pakistan at the end of 2021-22, didn’t respond to a request for comment.

Published in Dawn, October 26th, 2022