In a big blow to former TRG Pakistan CEO, Zia Chishti, a US arbitrator has ordered him to pay $9.1 million (Rs2.5 billion) to TRG International, media learnt on Tuesday.
The arbitration was regarding the legality of share pledges of TRG Pakistan that were central to Zia Chishti’s borrowing Rs2.5 billion from JS Bank to buy additional shares of TRG Pakistan. TRG had alleged that it was part of a plan by Chishti and the JS Group to illegally take over TRG Pakistan as a first step towards an attempt to control TRG’s international assets.
TRG Pakistan shared the development in a notice to the Pakistan Stock Exchange (PSX) on Tuesday.
“The company has been informed by its affiliate The Resource Group International Limited (“TRGIL”) that a final award has been issued by a US arbitrator in respect of the arbitration initiated by TRGIL against Mr Chishti challenging the pledging by Mr Chishti of company shares owned by him.
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“On January 27, 2025, the arbitrator had issued a partial final award which ruled, inter alia, that shares pledged by Mr Chishti, primarily to JS Bank as security for a loan, were in breach of contractual obligations of Mr Chishti.
“On April 22, 2025, the arbitrator issued a final award that, in addition to the remedies contained in the partial final award dated January 27, 2025, ordered Mr Chishti to pay TRGIL a sum of US$ 9.1 million,” the notice read.
TRG contended that Chishti was not allowed to pledge the shares given his contractual undertakings, and had asked the arbitrator to order him to remove the pledge.
In January 2025, the US arbitrator ruled in favour of TRG, and declared that Chishti had breached his contractual obligations by making the pledge. The arbitrator also ordered him to remove the pledge.
On April 22, 2025, the arbitrator ordered Chishti to pay $9.1 million (or PKR 2.5 billion) to TRG.
As questions are raised about the ability of Mr Chishti to pay such a significant amount to TRG, the fate of Rs2.5 billion loan from JS Bank to Chishti remains unclear.
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In recent court filings in Karachi, JS Bank has declared the loan to be in default.
TRG has had stay orders in place from the Sindh High Court since 2023 preventing the exercise of security on the loan.
It is unclear whether the loan continues to be carried on JS Bank’s books given the default and the stay orders on collateral.
During the most recent quarter ended March 31, 2025, JS Bank reported profit before tax of Rs2.7 billion, which could get wiped out with a write-off of this loan.
Market analysts have questioned the nature of the loan made in 2022, as it represented a huge exposure for JS Bank for a loan made to a single person. The loan was renewed in November 2024 despite the stay orders on the share pledge security were in place, only to be in default two months later.
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In the bourse notice on Tuesday, TRG Pakistan also shared that it had received copies of certified orders regarding the adjudication of Writ Petitions 3383 and 3395 of 2025 filed in the Lahore High Court and 693 of 2025 filed in the Islamabad High Court by Zia Chishti.
In both writ petitions, Chishti had sought to suspend ad-interim orders of the Civil Judge in Lahore and Islamabad dated December 2, 2024, December 10, 2024, and February 11, 2025, respectively, that restrained the company in respect of its board elections.
“On April 8, 2025 the Honorable Islamabad High Court judge was pleased to dismiss Writ Petition 693 of 2025 and on April 11, 2025, the Honorable Lahore High Court judge was pleased to dismiss Writ Petitions 3383 and 3395 of 2025,” the notice read.
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