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- Kristo Käärmann was fined £365,651 by the FCA in February 2021
- HMRC added him to its list of public tax defaulters seven months later
The co-founder and chief executive of fintech company Wise has been fined £350,000 for failing to report personal tax issues to the City regulator.
Kristo Käärmann would have paid a fine of £500,000, but received a 30 per cent discount thanks to his cooperation with the Financial Conduct Authority.
This follows a £365,651 fine from the FCA in February 2021 for failing to notify HMRC of a capital gains tax liability after it sold shares worth £10m in 2017.
Penalty: Kristo Käärmann, co-founder of fintech company Wise, has been fined £350,000 for failing to inform authorities about his tax problems.
HMRC added the Estonian-born businessman to its list of public tax defaulters seven months later.
Regulators have since launched an investigation into Käärmann, who was worth £1.7bn in the latest Sunday Times rich list.
The FCA said Käärmann failed to “adequately consider the significance of the tax issues or notify the FCA, despite being aware of them for more than seven months”.
However, it found no “adverse findings” regarding his “continuing suitability and decorum” to perform his current duties as Wise’s boss and concluded that he did not behave “with a lack of integrity.”
Therese Chambers, joint executive director of enforcement and supervision at the FCA, said: “We and the public expect high standards from financial firm leaders, including being frank and open.”
“It should have been obvious to Mr Käärmann that he needed to inform us about these matters, which were very relevant to our assessment of his suitability and decorum.”
The Estonian national founded Wise in 2011 with Taavet Hinrikus after the couple became frustrated by the high costs of transferring cash to their home country.
The company’s financial backers include Virgin Group tycoon Sir Richard Branson, venture capital fund Andreessen Horowitz and Paypal co-founder Peter Thiel.
Wise was valued at £8.75bn when it listed three years ago on the London Stock Exchange, making it the largest initial public offering of a technology company in the UK capital. However, its market capitalization has since dropped to around £7.5 billion.
Over last summer, Wise warned that revenue growth will be slower this financial year following recent price reductions aimed at attracting more consumers.
In its second quarter results, Wise’s underlying revenue rose 17 per cent year-on-year to £337 million, while customer numbers grew 23 per cent to 8.9 million.
Käärmann told investors on Monday: ‘After several years and full cooperation with the FCA, we have closed this process.
“I remain focused on fulfilling Wise’s mission and achieving our long-term vision of being ‘the’ network for the world’s money.”
Wise actions They were down 0.4 per cent at 732p this morning and have fallen around 13 per cent since the start of the year.
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