MUHAMMAD ZIAULLAH KHAN CHISHTI vs TRG PAKISTAN LIMITED Ss — 2025 CLD 1814 KARACHI-HIGH-COURT-SINDH

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MUHAMMAD ZIAULLAH KHAN CHISHTI VS TRG PAKISTAN LIMITED Ss. 2 (7)(d), 86 (2), 88, 158 (2), 286 & 301---Listed Companies (Buy-Back of Shares) Regulations, 2019, Regln. 13---Affairs of company---Complaint---Winding-up of company---Grounds---Opression of minority shares---Substantial shareholder---Subsidiary company holding shares in its holding company---Delay in election of directors---Petitioner was holding 16 % shares of company under winding-up, which was a public listed company---Petitioner alleged that shares of company under winding-up were put to public offer which had earlier been purchased by respondent company with majority shares---Validity---Grounds for winding-up a company are set-out in S.301 of Companies Act, 2017---Company may be wound up by the Court under S.301 (g)(iii) of Companies Act, 2017 if the company is - conducting its business in a manner oppressive to the minority members or persons concerned with the formation or promotion of the company---Oppression of minority members by the companyis a recognized ground for winding-up of that company---Where oppression of minority is established under S.286 of Companies Act, 2017, it is implicit that there should be cause to wind-up the company---Once threshold of oppression is crossed, the threshold of winding-up is automatically crossed---Where it is established under S.286 of Companies Act, 2017 that affairs of the company are being conducted, or are likely to be conducted, in an unlawful or fraudulent manner, or in a manner not provided for in its memorandum, a case for winding-up can be triggered under S.301 (g)(i), (ii), (iv) & (v) of Companies Act, 2017---Such acts committed by the Board of company under winding-up in collusion with respondent company with majority shares, oppressed minority shareholders such as the petitioner who were in the category of 'substantial shareholder' as defined in S.2(7)(d) of Companies Act, 2017 i.e. holding an interest of 10% or more in the company---Once oppression of minority shareholders was established, a case for winding-up was made out in view of S.301 (g)(iii) of Companies Act, 2017 and Court could then consider corrective orders under S.286 (2) of Companies Act, 2017---Violation of S.86(2) of Companies Act, 2017 to divert funds/assets of the company for no apparent gain to the company and deliberate violation 158(2) of Companies Act, 2017 to delay election of directors at the behest of the largest shareholder was also mismanagement by the Board of company under winding-up, conducting the affairs in unlawful and fraudulent manner within the meaning of S.286 of Companies Act, 2017---High Court in exercise of powers under Ss. 286 & 287 of Companies Act, 2017 declared that shares held by respondent company with majority shares were to be the property of company under winding-up as the same were deemed to have been purchased by the company from its shareholders under S.88 of Companies Act, 2017 as treasury shares subject to the conditions set-out in S.88 (3) of Companies Act, 2017---High Court directed Central Depository Company to amend central depository register accordingly---High Court directed the company to amend register of its members accordingly and make other consequential alterations to its record---High Court declared that public offer made by respondent company with majority shares stood abated as it was to acquire controlling shares of the company---High Court directed the Manger to the Offer to return the shares tendered by shareholders of the company to the respective shareholders---High Court directed Board of directors of the company to forthwith issue notice for calling an extra-ordinary general meeting of the company for electing directors---High Court further directed that Board of Directors of the company, constituted after election would then decide whether to retain treasury shares, to cancel them or to sell them as per Regln. 13 of Listed Companies (Buy-Back of Shares) Regulations, 2019 provided that, where the treasury shares would exceed the limit fixed by Regln. 9 of Listed Companies (Buy-Back of Shares) Regulations, 2019, the shares exceeding such limit were to be cancelled or sold---Petition was allowed accordingly.

MUHAMMAD ZIAULLAH KHAN CHISHTI vs TRG PAKISTAN LIMITED Ss — 2025 CLD 1814 KARACHI-HIGH-COURT-SINDH

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