Christo Kaarmann, CEO and co-founder of Wise.
Eoin Noonan | Sports file | Getty Images
£ 3.9 billion ($ 4.8 billion) CEO of fintech wise He is being investigated by British regulators after tax authorities found he had not paid his £ 720,000 tax debt.
Christo Kaarmann, co-founder of Wise in 2011, was recently is fined His Majesty’s Income and Customs – the UK government’s department responsible for tax collection – was fined £ 365,651 in 2018 for failing to comply with the tax bill.
A company spokesman at the time said Kaarmann had filed personal tax returns late for the 2017/18 tax year, but has since paid his debt along with penalties for “significant” delays.
The UK’s Financial Conduct Authority has now launched an investigation into the matter, Wise said in a statement on Monday. Regulators are investigating Kaarmann’s failure to meet regulatory obligations and standards.
The FCA declined to comment on the investigation.
Wise said the board has hired outside lawyers to investigate Kaarmann’s tax breach. The study was completed in the fourth quarter of 2021 and its results were shared with the FCA.
David Wells, Wise’s chairman, said the company’s management took Kaarmann’s tax default and FCA investigation “very seriously.”
“After reviewing the matter at the end of last year, the Council requested that Christo take corrective action, including the appointment of professional tax advisors to ensure that personal tax matters are properly managed,” he said.
“The board has also shared details of its findings, assessments and actions with the FCA and will continue to support Cristo as CEO, fully cooperating with the FCA as required.”
The investigation could have significant consequences for Wise and his CEO. Kaarmann may be forced to resign and if regulators decide it fails, stop working in the industry “appropriate and correct” test.
A Wise spokesman declined to comment further on the FCA investigation.
Wise stocks moved with difficulty in Monday’s news. The company’s shares have fallen sharply since their debut in July 2021, losing about 57% of their value.
Wise, competes with others PayPal and Western union, made a name for himself by fighting secret payments in foreign currency, and soon became a favorite of the UK’s startup scene. The company has since diversified into other financial sectors, including banking and investment.
