Israel's Ministry of Defense today announced that the $900 million sales of cyberattack company Paragon Solutions has not yet received the required approval. According to the Ministry of Defense, the company has held initial talks on the expected sale to Us private investment fund AE Industrial partners but has still not submitted an official report as required by law.
As the deal involves a cyberattack company, which has developed advanced tools for gathering digital intelligence, Israeli law requires tight supervision of it, especially if it is moving into foreign hands. Therefore, any transfer of technology or information to foreign organizations requires a special license and compliance with strict terms inb order to receive approval by the Ministry of Defense.
The Ministry of Defense stressed that any decision on the matter will be taken through purely professional means and that there has been no contact from political or private figures regarding the deal. The Ministry also points out that in recent years requirements and supervision of Israeli cyberattack companies have become stricter due to instances of malevolent use of similar technologies around the world.
The huge sale of Paragon, which could be for as much as $1 billion, would bring a handsome profit for the company's employees and founders. Under the emerging terms of the deal, half of the acquisition amount - $500 million would be divided up by the employees and founders, including former Prime Minister Ehud Barak, who would receive $10-15 million.
Paragon, which was founded four years ago by a group of senior figures in Israel's intelligence community led by former IDF intelligence 8200 commander Brig. Gen (res.) Ehud Schneorson has developed spyware called "Graphite." The system specializes in intelligence gathering from encrypted apps, and the company stresses that it only operates in democratic countries and under strict ethical restrictions.
Published by Globes, Israel business news - en.globes.co.il - on December 19, 2024
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