LAHORE: Share price of The Resource Group (TRG) Pakistan crashed 9.78 per cent on the Pakistan Stock Exchange (PSX) on Wednesday as the news of sexual harassment allegations against company CEO Zia Chishti triggered panic selling.
Chishti, a Pakistani-American, was accused of sexual harassment and assault by a former employee of data and software company Afiniti, of which Chishti is the CEO and chairman of the board. Afiniti, which also has on its board former UK prime minister David Cameron and Princess Beatrice, a member of the British royal family, is owned by TRG International which is owned by TRG Pakistan.
Late on Wednesday, Cameron resigned from his position as the chairman of the advisory board of Afiniti. On the other hand, Afiniti in a statement denied allegations against the CEO and said: “We take any allegations of this nature extremely seriously. Afiniti has investigated Ms Spottiswoode’s claims with independent counsel and concluded that the arbitral decision she references was erroneous. Afiniti’s CEO and chair Zia Chishti strongly disputes all accusations against him.”
The share price of TRG fell to Rs120.67 from Rs130.5, with 15.9 million shares traded during the day as the news shock triggered panic selling, market sources tell us. The company had maintained a bull-run since March last year, with the share price of the company soaring from Rs11.88 on March 26, 2021 to a peak of Rs181 this year in April.
“There is a negative sentiment in the market despite the fact that the company is maintaining a stable business. While the business is fundamentally unaffected, the face of the company is under accusations in foreign markets where it has most of its business,” said market sources.
Afiniti uses artificial intelligence and machine learning software to match callers with call center agents and boasts a client roster that includes UK’s Virgin Media and Sky. The company, one of the unicorns founded by a Pakistani entrepreneur, also boasts of annual revenue growth of more than 200 per cent, and has been eyeing a public listing on the New York Stock Exchange (NYSE).
Sources further said that the TRG stock was going to see a further fall tomorrow because shares had been traded at the lower lock during the day, but will likely recover soon because the business is fundamentally stable.
Allegations part of a movement against forced arbitration in US
The allegations against Chishti emerged during a US congressional committe hearing which is looking at how forced arbitration clauses in employment contracts can make victims of workplace sexual violence, harassment, and discrimination move into private arbitrations.
The committee heard accounts of former employees of Afiniti, American broadcaster CBS and Louis Vuitton shared accounts of sexual abuse, rape and harassment and how they had to keep quite because they had signed contracts under “forced arbitration” clauses with companies that employed them.
In the hearing, Tatiana Spottiswoode, a law student formerly employed by Afiniti, told members of the US Congress that she had felt pressured into a sexual relationship by Chishti.
Spottiswoode told the committee that despite previously telling Chishti that she did not consent, she felt pressured into having sexual relationship with Chishti on an overseas trip, when he also allegedly beat her. Afterwards, she said, Chishti initiated arbitration against her and her father who was also employed by Afiniti.
In May 2019, Spottiswoode’s arbiter ruled in her favour that she had been sexually harassed and assaulted by Chishti, following which she said he offered to pay $1 million to drop arbitration against her father if she erased the ruling.
In corporate America, many consumer contracts including employment contracts have forced arbitration clauses which consumers and employees are often forced to sign in order to receive services or get hired and often don’t know they’ve signed-away their legal rights under the contract.
In the event of a dispute with a corporation, forced arbitration says that a consumer or an employee cannot take their case to court but instead has to go to a private arbitration forum designed by the corporation the dispute is against.
Most forced arbitration clauses require the consumer to waive their rights, while allowing the corporation to sue in courts and consumers often must pay steep filing fees just to initiate a case and pay their share of the arbitrator’s hourly charges.
In addition, forced arbitration clauses often allow the corporation to choose the location, regardless of how inconvenient or costly travel will be for the consumer. Since only businesses are repeat users of an arbitrator, there is a disincentive for an arbitrator to rule in favor of a consumer if he expects further retentions.
Forced arbitration clauses often restrict the individual’s ability to argue his or her side of the case. For example, many restrict the individual’s ability to obtain necessary evidence. Also, it is nearly impossible to appeal adverse decisions by arbitrators.
While proceedings and records of the courts are open to the public, most forced arbitration clauses require that proceedings be kept confidential, even if the case raises important public health and safety issues.
Forced arbitration has been around since 1925 when the US Congress passed the Federal Arbitration Act to guarantee that two corporations could respectfully arbitrate disputes. The sentiment against forced arbitrations gained popularity after a US Supreme Court ruling in 2011.
On Nov 1, 2018, more than 20,000 Google employees walked out to protest the company’s pattern of unethical decision-making and forced arbitration practice. A New York Times investigation found that Andy Rubin, a top Google executive, received $90 million after an employee made a sexual assault allegation against him; because of confidentiality clauses, that was how even Google employees learned about it. They organised a walkout.
In response, the company ended its policy of requiring mandatory arbitration for sexual harassment cases a week later. Other top tech companies like Facebook, Square, Airbnb, eBay, Uber, and Lyft soon followed suit.
Wednesday’s hearing also sought to fortify legislation that would ban the use of forced arbitration in cases of alleged sexual violence and harassment.
Look at the BIGGER picture. Zia chisti was founder of Align Tech (now a $40 billion company). He was thrown out in the wake of 9/11. later got a settlement of $29M but was ousted. Now when Afiniti is in line to be a top AI company in the world and standing with the likes of Google and facebook, a Monica Lewishky was thrown at him and everything crumbles. They will never let a Pakistan get that spot …NEVER.
I’ve worked in Afiniti and its one of the safest place for women to work (even in night shifts). Everyone loves and respects Zia. He doesnt have a reputation close to what is claimed nor do the top management. LIES LIES LIES!
Lets support him instead of making money out of this.
Whether it’s a harassment case or rape case? U.S is on top on these types of cases. U.S. does not follow Islamic Laws nor TRG is a Islamic based company. Wherever men and women works together, these types of cases are imminent/common. It’s seems like a BLACK MAIL CASE. Lawyers alongwith judges trying to blame CEO to get some money. All bull shit.