The high-profile buyback saga involving TRG Pakistan Limited grappled with yet another twist, when AKD Securities Limited issued a Corrigendum Notice on behalf of Greentree Holdings Limited today, significantly altering key statements in its Public Announcement of Offer (PAO) initially published on January 15, 2025.
The correction notice comes despite mounting legal pressure and ongoing proceedings in the Sindh High Court, where the legality of the deal is already under judicial review.
The corrigendum addresses what Greentree now describes as a disclosure “error” under Schedule-VII of the Securities Act 2015, clarifying that the shares acquired through the offer will not be transferred to TRG Pakistan Limited, reversing its earlier claim.
This adjustment raises questions over whether the original structure — which suggested TRG was effectively financing a buyback of its own shares through a wholly owned subsidiary — was a clerical mistake or a complete strategic misrepresentation.
Despite the revision, Greentree has not altered the underlying funding structure. TRG remains the ultimate beneficiary of the acquired shares through its control of Greentree, creating a potentially precedent-setting case of subsidiary-funded self-acquisition.
It is pertinent to note here that the Sindh High Court is currently hearing JCM No. 12 of 2025, where shareholder petitioners have challenged the legality of the acquisition under Section 86(2) of the Companies Act, 2017, which governs buybacks and prohibits companies from indirectly funding the purchase of their own shares without meeting specific legal conditions to prevent any instance of “wash transactions”.
During the hearings, it had previously been revealed that Greentree Holdings had informed the Securities and Exchange Commission of Pakistan (SECP) via email that its previous disclosure in the PAO was inaccurate, and no transfer of shares to TRG Pakistan was intended.
The SECP, however, has yet to issue a formal response or take regulatory action — a silence that has prompted speculation about potential pressure on the watchdog in a deal that could test the limits of corporate law in Pakistan.
The case could have wide-reaching implications for corporate governance, particularly in related-party transactions and subsidiary buybacks, if the court or SECP fails to intervene effectively.
Amid the controversy, the acceptance period for TRG Pakistan shareholders has now been formally updated for a third time and will run from July 2 to July 8, 2025, according to the corrigendum. However, as the court has yet to make a final determination on the legality of the buyback structure, the updated timeline may be subject to change based on further judicial or regulatory intervention.
This is not the first legal hurdle in TRG Pakistan’s ongoing efforts to consolidate ownership and restructure its governance. In earlier hearings, the Sindh High Court had stayed the execution of the buyback after shareholders questioned the acquisition model.
TRG Pakistan had argued that extending the acceptance period would allow it to retain investor confidence, especially given that the offer price of PKR 75 per share stood above the then-market price of PKR 65.14. Opponents feared speculative losses if the deal was derailed.
The legal wrangling is part of a broader battle for control at TRG Pakistan, which intensified following the ouster of founder Zia Chishti from the board in 2022. Chishti has since launched multiple legal challenges to regain influence, most of which have been dismissed. Notably, High Courts in Lahore and Islamabad recently threw out three of Chishti’s writ petitions challenging restrictions on board elections.
With the SECP yet to clarify its position and the High Court hearings ongoing, TRG Pakistan’s buyback remains legally precarious. The revised disclosure by Greentree may mitigate concerns of a blatant rule violation, but the indirect self-financing nature of the acquisition continues to draw criticism.
Analysts and legal observers view this case as a litmus test for Pakistan’s regulatory framework on conflict-of-interest transactions, and how far companies can stretch corporate structures without violating fiduciary responsibilities.
If the court rules in favour of the petitioners, the outcome could force a re-evaluation of similar acquisition structures involving subsidiary financing, potentially tightening compliance and disclosure obligations for all listed firms. If not, it may open the door to further regulatory arbitrage in Pakistan’s capital markets.
As of now, all eyes remain on the SECP and Sindh High Court for what could be a landmark decision in Pakistan’s corporate law history.
