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Shut down Pegasus, sell entire company: Stressed Israeli company NSO weighing its options, says report

🔴 The shutting down of the Pegasus unit could decrease the value of NSO as a company as the unit accounts for “about half of NSO’s revenue”, the report said.

By: ENS Economic Bureau | New Delhi |
Updated: December 15, 2021 5:12:20 am
A logo adorns a wall on a branch of the Israeli NSO Group company, near the southern Israeli town of Sapir. (File photo via AP)

Israel’s spyware company NSO Group is considering shutting down its controversial unit Pegasus or even selling the company itself after facing possible debt defaults, according to a report from Bloomberg.

The company is said to be in talks with multiple investment funds for either refinancing so that it can service its debts, or sell the company. Two US-based fund houses are also said to be in the race for control of the company and have “discussed taking control and closing Pegasus”, Bloomberg reported, citing a source.

Under the refinancing option, the investment houses could inject as much as $200 million and “turn the know-how behind Pegasus into strictly defensive cyber security services, and perhaps develop the Israeli company’s drone technology”, the report said.

The shutting down of the Pegasus unit could decrease the value of NSO as a company as the unit accounts for “about half of NSO’s revenue”, the report said.

NSO Group’s software Pegasus is alleged to have been used by governments across the world to spy on journalists, activists, government officials, and even their own ministers. Though NSO maintains that it deals only with federal governments and that too after intense scrutiny, critics have questioned the deals the company has made, alleging that it has helped countries spy on their citizens.

Earlier this year, in a series of reports published by several news outlets across the world, it was alleged that the Pegasus had been used to snoop on journalists, activists, government officials, and even ministers, including India’s Minister for Electronics and Information Technology Ashwini Vaishnaw.

Following the report, some of the activists and journalists whose names were in the list of people whose devices had allegedly been infected with Pegasus, moved the Supreme Court of India seeking the formation of a committee which could look into the issue.

On October 27, a three-judge Supreme Court bench of Chief Justice of India N V Ramana, Justice Surya Kant and Justice Hima Kohli ordered the formation of a three-member technical committee whose functioning is to be overseen by retired Supreme Court judge Justice R V Raveendran.

Countries such as the US have taken action against the NSO Group. In November, the NSO Group and Candiru, another Israeli company, were added to the Entity List “based on evidence that these entities developed and supplied spyware to foreign governments that used these tools to maliciously target government officials, journalists, business people, activists, academics, and embassy workers”.

Being added to the Entity List means the companies will not be able to access American hardware and software. However, given that companies like NSO Group and Candiru operate covertly, unlike public facing products of companies like Huawei, enforcement of the restrictions remain unclear.

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