A legal dispute has put a temporary halt to an anticipated $52 million (PKR 14.4 billion) foreign exchange inflow into Pakistan from Greentree Holdings, the largest shareholder of TRG Pakistan. This development has triggered concern among market participants, who see the transaction as a significant opportunity to bolster the country’s capital markets and attract foreign investment.
Greentree Holdings, which owns a 29.7% stake in TRG Pakistan, initiated a tender offer on January 15, 2025, to acquire an additional 35.1% stake in the company. The book closure took place on February 21, and the offer was set to remain open from March 6 to March 12. The transaction was expected to allow TRG shareholders an exit at a premium price while simultaneously bringing in much-needed foreign exchange to Pakistan.
However, the process was disrupted when Sign Source Limited, a Karachi-based company that holds a mere 0.3% stake in TRG Pakistan, along with its CEO and TRG director Abid Hussain, filed a legal challenge against the deal. The writ petition, submitted to the Islamabad High Court on February 26, was directed against the Securities and Exchange Commission of Pakistan (SECP), TRG Pakistan, and Greentree Holdings. The petitioners raised concerns over compliance with Pakistan’s securities laws and requested a review of the share purchase process. The legal proceedings have sparked frustration among investors and industry experts who argue that the intervention of a minor shareholder in a high-value transaction could set a dangerous precedent for Pakistan’s financial markets. They believe that such disputes may deter foreign investors and disrupt the efficient functioning of capital markets.
Greentree Holdings, an offshore investment vehicle established by TRG, has been actively repatriating proceeds from asset sales to TRG Pakistan shareholders. In 2022-23, it facilitated an $86 million inflow into Pakistan through share purchases following TRG’s divestment from eTelequote, a U.S.-based subsidiary. The latest $52 million tender offer was reportedly part of a similar process, funded through TRG’s partial divestment from IBEX Limited, a NASDAQ-listed entity. Industry sources suggest that the legal battle is tied to an ongoing power struggle over TRG Pakistan’s assets. The dispute is believed to involve TRG’s management and its former CEO, Zia Chishti, who allegedly has the backing of a brokerage firm. Chishti resigned from TRG in 2021 after a U.S. Congressional hearing revealed an arbitration ruling against him for allegations of sexual harassment and assault.
Reports indicate that while TRG’s current management has been working to repatriate foreign exchange proceeds from its international asset sales, Chishti’s faction prefers to keep the funds offshore while the control battle plays out. TRG has faced multiple legal disputes in both Pakistan and the United States since 2022, with legal wrangling affecting major share transactions and corporate decision-making. In January 2025, TRG secured a legal victory in a U.S. arbitration case against Chishti, with the tribunal ruling that he had violated contractual agreements by pledging his TRG Pakistan shares to secure a loan from JS Bank. The funds from that loan were allegedly used to acquire additional TRG shares, a move that was deemed a breach of his obligations.
With the Islamabad High Court now restraining Greentree Holdings from proceeding with its share purchase, the market is closely watching how the legal challenge unfolds. Observers argue that the case has delayed what was expected to be a value-enhancing transaction for TRG shareholders and has placed further strain on Pakistan’s foreign exchange reserves by blocking a major anticipated inflow. The decision in the Sign Source case could have long-term implications for corporate governance and investment confidence in Pakistan’s financial markets.
