The Resources Group Pakistan, known as TRG Pakistan, has launched a legal battle against the alleged hostile takeover bid of Jahangir Siddiqui & Co (JS Group).
Sources told News360 that JS Group allegedly attempted to take over TRG Pakistan. They said that Zia Chishti – the founder of TRG – left no option other than leaving the venture capital company after facing allegations of sexual harassment.
In an ‘Open letter to the Publishers of Smear Campaign’, Zia Chishti reacted to the ‘smear campaign’ against him.
The publication read, “Your conduct in baselessly maligning a respected and senior official, Pakistan’s most successful technology entrepreneur, and most successful technology company, is reprehensible.
“There is not a shred of evidence to support your claims. Challenging the integrity of an individual who has dedicated his career and risked his life for Pakistan is cowardly and contemptible. You have accused me of dumping shares in my own company. In the past ten years, I have only purchased shares in TRG.”
“You have accused me of secretly controlling TRG to act in a manner that is harmful to shareholders and Pakistan. I have no control over TRG. In fact, TRG and its management have recently filed a lawsuit to keep me from asserting control over the company.”
“You are hiding your misinformation behind anonymous social media posts. This craven conduct befits the character of individuals who would propagate mischief and falsehoods for personal gain.”
According to Dawn News, 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.