FCA launches investigation into Wise CEO after tax default

LONDON (Reuters) -Money transfer company Wise said on Monday that Britain’s Financial Conduct Authority (FCA) has launched an investigation into its CEO Kristo Käärmann after he was named on a list of tax defaulters.

In September last year, the British tax authority (HMRC) included Käärmann in a list of people penalised for tax defaults. A spokesperson for Wise said that Käärmann was late paying his taxes in 2018 and had been fined.

Käärmann’s 365,651 pound ($449,677) penalty relates to a tax bill of 720,495 pounds, according to the information published by the government.

HMRC regularly publishes a list of people who deliberately default on their taxes, such as by filling in erroneous tax returns.

Following the publication, Wise started an investigation with support from an external law firm. That concluded at the end of 2021 and its findings were passed onto the FCA, the company said.

The FCA has now launched its own investigation regarding the regulatory obligations and standards to which Kristo is subject, Wise said.

“Kristo intends to cooperate fully with the FCA in its investigation,” said the company.

Käärmann co-founded Wise, the British financial technology firm previously known as TransferWise, with Taavet Hinrikus in 2011.

($1 = 0.8131 pounds)

(Reporting by Andres Gonzalez, editing by John O’Donnell)