Adds detail on U.S. congress testimony in paragraph 4

By Ariba Shahid

KARACHI, May 11 (Reuters) - Pakistan's Supreme Court has cleared the way for Zia Chishti, founder of outsourcing and technology firm TRG Pakistan TRGP.PSX, to regain influence over the company he resigned from five years ago over sexual harassment allegations.

The case could have implications for corporate governance standards in Pakistan, and has attracted attention because of TRG's international footprint, including indirect stakes in AI company Afiniti and Nasdaq-listed customer management firm IBEX.

Shares in TRG Pakistan rose as much as 10% on Monday after the decision, triggering a trading halt on the Pakistan Stock Exchange.

Chishti resigned from TRG-related positions in 2021 after a former Afiniti employee testified before the U.S. Congress that an arbitration ruling had found Chishti liable for sexual harassment and assault. Chishti has denied wrongdoing.

Chishti, the founder and former chief executive of TRG, said he intended to seek a board seat following the ruling.

"I plan to contest for a seat on the board and I am hopeful that we get three, possibly four seats on the board," he told Reuters.

He rejected concerns that his return could pose governance or reputational risks.

"The allegations against me have repeatedly been proven false, in defamation and litigation in Pakistan and UK. I don't perceive any reputation risk," he said.

"It took me four years to adequately establish that allegations against me are untrue. That's all that matters."

According to a short order released on Monday, the Supreme Court dismissed appeals by TRG Pakistan, Bermuda-based TRG International and shareholder Greentree Holdings against a lower court ruling that cancelled Greentree's 30% stake in the Pakistan-listed company.

TRG International in a press release said the ruling would "be a significant shift in voting influence within TRG Pakistan toward Mr. Zia Chishti".

TRG International warned any renewed association with Chishti could create "serious reputational, governance, commercial, and stakeholder risks" for TRG-related entities.

The dispute stems from a 2025 Sindh High Court ruling that found TRG Pakistan's board had improperly used company funds through Bermuda-incorporated Greentree Holdings to acquire shares in the company ahead of board elections, according to a briefing circulated by Chishti's advisers.

TRG International disputed that characterisation, saying the ruling had cancelled an approximately $90 million investment made by a foreign investor into Pakistan.

The company said "multiple layers of governance and structural protections", including a Bermuda court order placing Chishti's shares into receivership, would limit his practical influence, and that "a constructive and orderly resolution" removing it entirely "would best preserve long-term value for all stakeholders".