Greentree Holdings’ $52 Million TRG Pakistan share purchase faces legal challenge

A legal challenge has temporarily halted an approximately $52 million (PKR 14.4 billion) foreign exchange inflow into Pakistan from Greentree Holdings, the largest shareholder of TRG Pakistan.

Greentree Holdings, which holds a 29.7% stake in TRG Pakistan, had launched a tender offer on January 15 to acquire an additional 35.1% stake, with book closure taking place on February 21. The tender was scheduled to remain open from March 6 to March 12, 2025.

Share purchase of TRG Pakistan: Greentree Holdings says will bring in $50m foreign exchange inflows

However, on February 26, 2025, Sign Source Limited—a Karachi-based company holding just 0.3% of TRG Pakistan—along with its CEO and TRG director Abid Hussain, initiated legal proceedings challenging the share purchase. The writ petition was filed against the Securities and Exchange Commission of Pakistan (SECP), TRG Pakistan, and Greentree Holdings, raising concerns over compliance with Pakistan’s securities laws and seeking a review of the transaction.

Market participants have expressed disappointment over the legal dispute, as the tender offered around 13,000 TRG Pakistan shareholders an exit at a 25% premium to the pre-tender price while also bringing much-needed foreign exchange into Pakistan.

Greentree Holdings, an offshore vehicle established by TRG, has been responsible for remitting proceeds from asset monetization to TRG Pakistan shareholders. In 2022-23, Greentree facilitated an $86 million inflow through share purchases following TRG’s sale of its US-based subsidiary, eTelequote. The latest $52 million tender is believed to be part of the same remittance process, funded by TRG’s partial divestment from NASDAQ-listed IBEX Limited.

Market sources have raised concerns over the ability of a minor shareholder to disrupt such a significant transaction, which they say could set a damaging precedent for Pakistan’s capital markets.

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Industry experts speculate that the legal challenge is linked to an ongoing battle for control over TRG Pakistan’s assets. The dispute has reportedly placed TRG’s management at odds with its former CEO, Zia Chishti, who is allegedly backed by a brokerage firm. Chishti resigned from TRG in late 2021 following a U.S. Congressional hearing that publicly disclosed an arbitration award against him for sexual harassment and assault.

While TRG’s current management has been repatriating foreign exchange proceeds from its asset sales, sources claim that Chishti’s faction prefers keeping these funds offshore pending the outcome of the takeover struggle. TRG has been entangled in legal disputes in both Pakistan and the U.S. since 2022, with multiple legal proceedings impacting share transactions.

In January 2025, TRG prevailed over Chishti in a U.S. arbitration case, which ruled that he had violated contractual obligations by pledging his TRG Pakistan shares to obtain a loan from JS Bank, using the funds to acquire additional TRG shares.

Market observers are closely monitoring further developments in the Sign Source case, as the ongoing legal process has stalled what was perceived as a value-accretive transaction for TRG shareholders while blocking a major foreign exchange inflow into Pakistan.