A Sindh High Court judge has lifted a stay against criminal defamation charges against The Resource Group (TRG) management and board brought by TRG’s former CEO, Zia Chishti, and directed the parties to pursue their remedies before the lower 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. Zia Chishti was forced to step down from TRG after a United States Congressional testimony by Ms. Tatiana Spottiswoode in November 2021 revealed an arbitration award against Mr. Chishti for sexually harassing and assaulting Ms. Spottiswoode.
Details of Defendants and Legal Maneuvers
Defendants named in the District Court proceedings initiated by Mr. Chishti include TRG Chairman Mr. Khaishgi, CEO 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, suspending all defamation proceedings brought by Mr. Chishti. However, after a twenty-month suspension, the High Court lifted this stay. The next hearing is scheduled for November 16 in the lower court.
Several defendants have petitioned the Supreme Court, claiming the proceedings initiated by Mr. Chishti are meritless.
Read More: LHC Dismisses Appeal by Magazine Editor in Zia Chishti Defamation Case
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 and other related parties of contractual violations. Although TRG secured an initial stay on this arbitration, a U.S. federal court has allowed a portion of the arbitration proceeding to continue while ruling that other portions are barred due to a previous release signed by Mr. Chishti after collecting tens of millions of dollars from TRG.
These ongoing legal battles could significantly impact TRG’s future, with Mr. Chishti’s continued effort to take control of TRG Pakistan. If Mr. Chishti wins on these various legal fronts, it could enhance his prospects of reclaiming control of TRG Pakistan. On the other hand, if Mr. Chishti fails in his efforts, he may have to permanently give up his desire to return to TRG.
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.
This article was received directly from the reporter.