NSO co-founders Shalev Hulio (left) and Omri Lavie.

NSO co-founders tighten grip on company amid legal battle

While the legal discussion continues on the competence of the company’s newly appointed directors, NSO shares were pledged to a holding company solely owned by NSO founder Omri Lavie

A dramatic development in the battles for control of NSO: the syndicate of lenders of the Israeli spy software developer pledged all the company's shares and transferred them to a new holding company, whose sole shareholder is the company's founder Omri Lavie, this according to a filing submitted to the District Court in Tel Aviv and information received from the Luxembourg Register of Companies. This development means that the previous controlling owners and their representatives, who are in open conflict with NSO's management and its founders, Lavie and Shalev Hulio, were effectively cut off from the company.
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עמרי לביא ו שלו חוליו מייסדי NSO
עמרי לביא ו שלו חוליו מייסדי NSO
NSO co-founders Shalev Hulio (left) and Omri Lavie.
(Photos: Vardi Kahana)
In recent months, the NSO Group has been conducting an extensive legal proceeding, at the center of which is the question of the competence of two directors appointed by the consulting company BRG, which represents the controlling owners of the company (a group of investors organized under an entity called NOAL). The lawsuit was filed by Q Cyber Technologies, one of the companies in the NSO Group, which in every respect is identical to NSO itself (the CEO, Yaron Shohat, is also the CEO of the NSO Group), against the controlling owners, the founders Hulio and Lavie, the syndicate of lenders, and a series of parent companies based in Luxembourg, on the grounds that due to the ambiguity surrounding a legal proceeding in Luxembourg it is not clear whether the directors appointed by BRG are indeed “kosher”.
As part of this procedure, a notice was submitted to the court last week according to which the syndicate of lenders, which lent half a billion dollars to the company as part of the procedures to buy back shares from the Francisco Partners fund, which was the previous controlling owner of the company, exercised its rights according to the loan agreement and pledged all NSO shares.

Until now, the shares of NSO's Luxembourg parent company, NorthPole, were fully held by a holding company called Diamond and served as collateral for the syndicate of lenders. On Friday, about two weeks ago, in accordance with its rights according to the loan agreements, the syndicate took the pledged shares from NorthPole and transferred them directly to a third party - a new holding company created in January in Luxembourg called Dufresne Holdings. According to the announcement, the shares of this group "will be held by a new group of investors". However, according to the Luxembourg Registrar of Companies, as of February 10, Dufresne Holdings has one shareholder and one director: Omri Lavie. Following this change, the new controlling owner held shareholder meetings in NorthPole and all the subsidiaries down the chain, and replaced all the directors in them. This procedure also included the replacement of directors in the Israeli parent company of NSO (Osy), including the directors appointed by BRG, with a single and new director - Lavie. This, it is claimed, "will be until the entry of the new group of investors is completed according to the agreed-upon format".
NSO did not respond to Calcalist’s inquiries.
A spokesperson for TREO NOAL GP, general partner of the NOAL Fund, said:
"NSO Group’s lenders, who have exercised effective control over the company for the past 15 months, have seemingly organized a foreclosure under their loan agreements. This follows NSO’s failure to meet its financial obligations since 2021, the need by lenders to provide additional financing to keep the company afloat in 2022, and repeated attempts to sell the company that have all failed.
"Despite holding the majority equity interests in NSO, the NOAL Fund has consistently been denied even basic corporate information by NSO and its founders, including information related to the company’s compliance with U.S. laws; whether Pegasus spyware continued to be sold to elevated risk customers’ and what the company had done to address allegations of widespread misuse of its products. Recent litigations brought by NSO’s founders in Israel and Luxembourg were aimed at avoiding disclosure of these issues, amongst others.
"All of this demonstrates what we have long asserted – that NSO has operated for the benefit of its lenders since 2021, and that the Fund’s investment in the company has been and remains valueless."