Under-performance claims: TRG says campaign part of ex-CEO’s effort to illegally take control

TRG Pakistan said on Thursday it remains committed to protecting its stakeholders, and ensuring its former CEO Zia Chishti does not cause damage to its assets by unlawfully taking control of the company.

The statement was shared by TRG Pakistan Limited in its notice to the Pakistan Stock Exchange (PSX) on Thursday.

“TRG Pakistan Limited has taken serious note of yet another malicious media campaign against the company, repeating and amplifying misleading, false and defamatory assertions made by the company’s former CEO, Zia Chishti, in paid advertisements in the press,” read the notice.

TRG alleged that some of these articles circulating on multiple online media platforms are “verbatim copies of each other, effectively making these advertisements, albeit in a different form”.

“The company believes that this campaign is part of a continuing malicious and mala fide effort by Chishti, along with his associates and persons acting in concert with him, to discredit the company’s current management and certain directors, assert influence, and attempt to illegally take over control of the company.

“The company remains committed to protecting its public shareholders and other stakeholders, and ensuring its former CEO does not cause damage to its assets by unlawfully taking control of the company or even asserting influence or association with the company, which the Company believes will be damaging to the value of its underlying assets,” TRG Pakistan said.

The company alerted its stakeholders to only place reliance upon information disseminated through official channels and “not to be influenced by the continued malicious and mala fide smear campaign being run against the company, its management and certain directors by its former CEO, his associates and other persons acting in concert with him”.

The statement comes after some media platforms carried articles that questioned the performance of the company that has seen its share price decrease nearly 20% since the start of the year despite the benchmark KSE-100 advancing around 19% to near the 48,500 level during the same period.

However, an article also stated that the company posted a lower loss after tax, which went down from Rs4.98 billion in FY22 to Rs1.34 billion in FY23.

Days ago, TRG Pakistan had also separately said that any association with Zia Chishti would be highly damaging to the value of the company’s underlying assets.

Background

TRG Pakistan, which has gotten caught up in a web of legal battles and attempts of a hostile takeover, was first rocked in November 2021 when then CEO and founder Chishti was accused in the US of sexual assault during testimony to a hearing into how forced arbitration clauses signed with companies have been used to prevent survivors of sexual harassment and sexual violence from pursuing cases through the courts.

Tatiana Spottiswoode, the ex-employee at Afiniti – the US company also founded by Chishti and in which TRG International has a controlling stake in – was among one of the witnesses, which included former employees of broadcaster CBS and luxury giant LVMH, who shared experiences they said they had been required to keep quiet because they had signed contracts with “forced arbitration” clauses, stated a report by The New York Times on November 16, 2021.

The testimony, which implicated executives at the companies, came as the House Judiciary Committee was considering legislation that would abolish forced arbitration for victims of sexual assault and harassment, said the report.

Chishti disputed all accusations then, according to a spokeswoman for Afiniti.

However, on November 19, 2021, the Board of Directors of Afiniti Ltd announced that Chishti has stepped down from his role as chairman, Chief Executive Officer, and director of Afiniti, effective immediately.

It appointed Larry Babbio as Chair of the Board of Afiniti, and also announced the formation of a Special Committee of the Board to investigate issues surrounding the conduct of its former CEO and Chair.

Later that month, Chishti also resigned from his role as CEO and a Director of TRG Pakistan Limited.

His undignified departure has since turned into a power struggle with the TRG looking to stave off what were seen as hostile takeover bids.