The Sindh High Court has directed that criminal defamation charges against The Resource Group (TRG) management must proceed, ordering TRG Chairman Mohammed Khaishgi and CEO Hasnain Aslam to appear before the court. This development follows an earlier ruling by the District and Sessions Court in Karachi in February 2023, which allowed criminal defamation charges against the board of TRG International, based in Bermuda, to advance. The charges were initiated by Zia Chishti, former CEO of TRG Pakistan, who alleged that defamatory statements were made about him in a letter sent by TRG International to TRG Pakistan.
Details of Defendants and Legal Maneuvers
Defendants named in the District Court proceedings include Mr. Khaishgi, Mr. Aslam, CFO Hassan Farooq, General Counsel Pat Costello, and a roster of current and former TRG International directors, such as Zafar Sobani, Patrick McGinnis, Khaldoon Latif, and John Leone. The defendants initially secured a stay from the Sindh High Court, halting the trial. However, after a twenty-month delay, the High Court lifted this stay, instructing the District Court to continue the case. The next hearing is scheduled for November 16, and failure to appear could result in arrest warrants.
Read More: LHC Dismisses Appeal by Magazine Editor in Zia Chishti Defamation Case
Several defendants have petitioned the Supreme Court for an additional stay. Legal experts believe this is unlikely, given the Sindh High Court’s recent ruling, which highlighted TRG’s management’s attempt to bypass procedural norms by filing revision applications directly with the High Court. The court underscored that such grievances should first be addressed in the trial court.
Broader Legal Context
The Karachi criminal defamation case forms part of an extensive series of legal battles between Mr. Chishti and TRG’s current leadership, which includes opposing arbitrations in the United States. In one such arbitration filed by TRG in January 2023, the company alleged that Mr. Chishti was prohibited from selling or leveraging his TRG shares. Consequently, a stay order in Pakistan froze Mr. Chishti’s shares until the conclusion of the U.S. arbitration.
Conversely, Mr. Chishti filed an arbitration in the U.S., accusing TRG, Mr. Aslam, Mr. Khaishgi, and other related parties of criminal, civil, and contractual violations. Although TRG secured an initial stay on this arbitration, a U.S. federal court rejected the stay last month and ordered the proceedings to continue.
These ongoing legal battles could significantly impact TRG’s future, especially with board elections set for January 2025. If Mr. Chishti wins in these various legal fronts, it could enhance his prospects of reclaiming control of TRG. In public filings, Mr. Chishti has highlighted the company’s current struggles under its existing management, including a dramatic decline in TRG’s stock price and significant financial losses, such as a loss exceeding 30 billion rupees last year.
In a statement, Mr. Chishti remarked: “TRG and its present management have taken millions of dollars out of the company for themselves while overseeing a collapse in the business. The company’s most prized asset, Afiniti, is now in insolvency in Bermuda. The company’s stock price is down over 70% while at the same time the Pakistani market is up 70%. The company is covering up sexual harassment allegations against its CEO Hasnain Aslam. The Company has not held an AGM of shareholders or had its accounts approved in three years. What was once Pakistan’s premier technology business has been ruined. Let’s see how the company’s shareholders vote in January when, after three years of disaster under this team, board elections are finally due.”
Both Mr. Aslam and Mr. Khaishgi declined to provide any comments. With the stay order lifted, the District and Sessions Court has commenced proceedings, issuing notices to Messrs. Khaishgi, Aslam, Leone, McGinnis, Saigol, Sobani, Latif, Costello, and Farooq. It remains uncertain whether the majority of these defendants, who reside outside Pakistan, will comply with the court summons and appear at the scheduled hearing.