August 20, 2022

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FCA investigating Wise CEO Christo Karman over tax default

FCA investigating Wise CEO Christo Karman over tax default

Christo Karman, CEO and co-founder of Wise.

Owen Noonan | Math file | Getty Images

fintech CEO worth 3.9 billion pounds ($4.8 billion) wise He is under investigation by UK regulators after tax authorities found he had failed to pay a tax bill of more than £720,000.

Christo Karman, who co-founded Wise in 2011, recently fined £365,651 by Her Majesty’s Revenue and Customs – the UK government department responsible for tax collection – for defaulting on a tax bill in 2018.

At the time, a company spokesperson said that Karman submitted his personal tax returns for the 2017/18 tax year late, but has since paid what he owes in addition to “significant” filing delays.

The UK’s Financial Conduct Authority has now opened an investigation into the matter, according to a statement from WISE on Monday. Regulators are examining whether Karman has failed to meet regulatory obligations and standards.

The Financial Conduct Authority declined to comment on the investigation.

Wise said her board of directors has hired outside attorneys to help investigate Karman’s tax abuse. The investigation concluded in the last quarter of 2021 and its findings have been shared with the FCA.

Wise Chairman David Wells said the company’s management takes the Karman tax default and FCA investigation “very seriously.”

“After reviewing the matter late last year, the Board requested that Christo take corrective action, including appointing professional tax advisors to ensure his personal tax affairs are appropriately managed,” Wells said.

“The Board has also shared details of its findings, evaluation, and actions with FCA and will cooperate fully with FCA when required, while continuing to support Kristo in his role as CEO.”

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The investigation could have major ramifications for Wise and her CEO. Karman They can be forced to step down and to stop operating in the industry if regulators judge that it has failed to Fit and proper test.

A Wise spokesperson declined to comment further on the FCA investigation.

WISE’s stock barely moved on Monday’s bulletin. The company’s stock has fallen sharply since its launch in July 2021, losing about 57% of its value.

The wise who competes with the likes of PayPal And the Western Union, made a name for itself by tackling hidden fees in foreign exchange and quickly became a darling of the UK startup scene. Since then, the company has branched out into other areas of finance, including banking and investments.