It has always been possible to enjoy the comedy aspect to the tale of Kristo Käärmann of Wise and his unpaid tax bill. Here was a near-billionaire co-founder and chief executive of a slick payments company who was apparently too disorganised to respond to HMRC’s reminders, to the point where he copped a £366,000 penalty and got himself publicly identified.
If the board was ever even vaguely amused, it’s not now. It takes matters “very seriously”, said the chair, David Wells. You bet: the Financial Conduct Authority has opened an investigation, which, at the regulator’s usual pace of inquiry, will ensure we’ll still talking about Käärmann’s 2017-18 tax demand in 2023.
One puzzle is what, precisely, the FCA is investigating. The company’s statement referenced “the regulatory obligations and standards to which he [Käärmann] is subject to”, which was slightly odd phrasing. Is the issue Käärmann’s compliance with the “fit and proper” standards under the FCA’s “approved person” regime, or is it a matter of whether additional measures should apply, given what’s happened? Impossible to say.
Also unexplained is why the FCA took so long to act. Perhaps officials were waiting for the findings of Wise’s own investigation, or perhaps they’ve spotted something they want to probe further. Again, one assumes all will be revealed eventually. In the meantime, though, the affair threatens to become a distraction for a company trying to live up to the hoopla that accompanied last year’s £8bn listing.
The valuation is now £4bn, thanks to the wider tech sell-off, and the onus is on Käärmann to show the business model of pinching high-value money-transfer trade from the big banks is intact. He owns 18% of the shares and is the public face of the
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