Zia Chishti Ordered to Pay $9.1 Million in Arbitration

In a significant setback for Zia Chishti, the former CEO of TRG Pakistan, a US arbitrator has mandated that he compensate TRG International with $9.1 million (equivalent to Rs2.5 billion), as reported on Tuesday.

The arbitration revolved around the legitimacy of TRG Pakistan’s share pledges, which were critical to Chishti’s Rs2.5 billion loan from JS Bank, intended for acquiring additional shares of TRG Pakistan. TRG had asserted that this was a component of a scheme by Chishti and the JS Group to unlawfully seize control of TRG Pakistan, serving as an initial move toward dominating TRG’s global assets.

TRG Pakistan communicated this development to the Pakistan Stock Exchange (PSX) through a notification 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 regarding the arbitration initiated by TRGIL against Mr Chishti, challenging the pledging of company shares owned by him by Mr Chishti.

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“On January 27, 2025, the arbitrator issued a partial final award, ruling that the shares pledged by Mr Chishti, primarily to JS Bank as collateral for a loan, were in violation of Mr Chishti’s contractual obligations.

“On April 22, 2025, the arbitrator rendered a final award that, in addition to the remedies outlined in the partial final award of January 27, 2025, directed Mr Chishti to remit US$ 9.1 million to TRGIL,” the notification stated.

TRG maintained that Chishti was prohibited from pledging the shares, considering his contractual commitments, and requested the arbitrator to instruct him to remove the pledge.

In January 2025, the US arbitrator sided with TRG, declaring that Chishti had contravened his contractual duties by making the pledge. The arbitrator also instructed him to eliminate the pledge.

On April 22, 2025, the arbitrator instructed Chishti to pay $9.1 million (or PKR 2.5 billion) to TRG.

As questions emerge concerning Mr. Chishti’s capacity to remit such a substantial sum to TRG, the destiny of the Rs2.5 billion loan from JS Bank to Chishti remains uncertain.

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In recent Karachi court submissions, JS Bank has declared the loan to be in default.

Since 2023, TRG has maintained stay orders from the Sindh High Court, preventing the enforcement of security on the loan.

It remains unclear whether the loan is still recorded on JS Bank’s financial records, given the default and the stay orders on collateral.

During the most recent quarter, which concluded on March 31, 2025, JS Bank declared a pre-tax profit of Rs2.7 billion, which could be negated by writing off this loan.

Market observers have questioned the specifics of the loan issued in 2022, noting that it represented significant exposure for JS Bank due to a loan made to a single individual. Despite the existing stay orders on the share pledge security, the loan was renewed in November 2024, only to default two months later.

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In Tuesday’s stock exchange notice, TRG Pakistan also disclosed the receipt of certified copies pertaining to the adjudication of Writ Petitions 3383 and 3395 of 2025, submitted in the Lahore High Court, and 693 of 2025, lodged in the Islamabad High Court by Zia Chishti.

In both writ petitions, Chishti sought to overturn ad-interim orders from the Civil Judge in Lahore and Islamabad, dated December 2, 2024, December 10, 2024, and February 11, 2025, respectively, which restricted the company regarding its board elections.

“On April 8, 2025, the Honorable Islamabad High Court judge dismissed Writ Petition 693 of 2025, and on April 11, 2025, the Honorable Lahore High Court judge dismissed Writ Petitions 3383 and 3395 of 2025,” the notice concluded.