The Sindh High Court (SHC) has ordered charges against The Resource Group (TRG) management to proceed, with the further order for the TRG Chairman Mohammed Khaishgi and CEO Hasnain Aslam to appear before the court.
The SHC ruling follows an earlier ruling by the District and Sessions Court in Karachi in February 2023, ordering criminal defamation charges against the management and board of Bermuda-based TRG International to proceed. The charges were brought by former TRG Pakistan CEO Zia Chishti challenging the allegedly defamatory statements made against him in a letter written by TRG International to its parent, TRG Pakistan.
The defendants in the district court were listed as Mohammed Khaishgi, the chairman of TRG Pakistan; Hasnain Aslam, the CEO of TRG Pakistan; Hassan Farooq, the CFO of TRG International; Pat Costello, the General Counsel of TRG International; and various present and former directors of TRG International including Zafar Sobani, Patrick McGinnis, Khaldoon Latif, and John Leone. They have all denied any wrongdoing.
After having been ordered by the district court to appear, the defendants approached the Sindh High Court and received a stay order that blocked the district court from proceeding, according to papers. After a twenty-month delay, the SHC vacated its stay and ordered the proceedings against the defendants to continue in the district court. The next hearing in the district court is set for November 16.
Several of the defendants have now approached the Supreme Court seeking a further stay of the proceedings, a TRG source said stating that the claim will be fought. Citing legal precedent, the court stated that all such grievances should first be heard in the appropriate trial court.
The criminal defamation proceedings in Karachi are part of a broader set of legal proceedings between Chishti and TRG’s present leadership, including duelling arbitrations filed against each other in the United States. In one arbitration that TRG filed against Chishti in January 2023, TRG alleged that Chishti was not allowed to sell or borrow against his TRG shares. TRG has received a stay order in Pakistan freezing Chishti’s shares pending the conclusion of the US arbitration.
On the other side, Chishti had filed an arbitration in the US alleging criminal, civil, and contractual violations by TRG, Aslam, Khaishgi, and other related defendants. TRG had received a stay on that arbitration, but this stay was rejected by a federal court in the United States last month which ordered the arbitration to proceed. People close to TRG has said they are defending the claim in every jurisdiction and will be presenting their facts before the courts in due course. They said the Pakistan proceedings are being dealt by their lawyers.
The expected rulings in the three sets of proceedings could have major consequences for TRG and its management. An election for the TRG board is expected in January of 2025 and should Chishti prevail in his various litigations that may increase his chances of retaking control of TRG. In his public filings, Chishti has pointed out that under the present management TRG’s stock price has collapsed and the company has recorded staggering losses including a loss of over Rs30 billion last year. TRG has said that the company is doing well and has no issues.
With the Sindh High Court vacating its stay orders, the District and Sessions Court trial court proceedings have commenced with notices issued to Khaishgi, Aslam, Leone, McGinnis, Saigol, Sobani, Khaldoon Bin Latif, Costello and Farooq, according to the court papers.
