Dissidents Win Control of NetSol

Bloomberg News

Dissidents led by New York money manager Jonathan Iseson won a proxy fight for control of NetSol International Inc., a money-losing software developer, and immediately replaced top management.

The insurgents owned 26% of the Calabasas-based company's stock when Iseson's group in April instigated its proxy bid to oust NetSol's management.

Though management held 41% of the company's shares, the dissidents won when shareholders voted their seven-member slate to the board, giving them control of the company.

The three brothers who ran NetSol were replaced. After being ousted, Najeeb Ghauri, 46, said in a phone interview he still considers himself chief executive. Cary Burch was named new CEO; dissident Peter Sollenne, 52, assumed posts previously held by former President Salim Ghauri, 45, and Naeem Ghauri, 43, who was chief operating officer.

Iseson's Blue Water hedge funds were the top performers in last year's first quarter, fueled by a 250% increase in NetSol, their largest holding.

Blue Water's fortunes flagged, and the thinly traded stock collapsed after it became widely known that Iseson's purchases were the primary force driving NetSol. More than $100 million was erased from the value of Blue Water funds by NetSol's decline.

NetSol, which develops software in Pakistan, plunged more than 90% from a high of $75 last year to 63 cents in April. The shares fell about $1.23, or 26%, to close at $3.57 on the Nasdaq Small-Cap Market.

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