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UK Investigates Wise CEO Kaarmann After Tax Breach

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Wise Plc said the Financial Conduct Authority has commenced an investigation into Chief Executive Officer Kristo Kaarmann almost a year after he was fined by HMRC for deliberately defaulting on his taxes.

The UK regulator is examining the “regulatory obligations and standards to which Kaarmann is subject,” according to a statement Monday. The executive intends to cooperate fully with the FCA in its investigation.

Wise shares were down 1.4% as of 11:21 a.m. in London, having earlier fallen as much as 5.3%.

Last year, Kaarmann was found to have either deliberately provided inaccurate documents, deliberately failed to comply with an obligation to notify HM Revenue and Customs about his circumstances or committed wrongdoing in relation to VAT or excise for the tax year ending April 2018, according to a listing of deliberate tax defaulters.

Wise’s board “will cooperate fully with the FCA as and when they require, while continuing to support Kristo in his role as CEO,” chair David Wells said in the statement.

The fintech conducted an investigation with an external legal counsel after Kaarmann’s name was included on HMRC’s list of individuals and businesses receiving penalties for a deliberate default regarding their tax affairs. After the investigation concluded in the last quarter of 2021, the board shared details of its findings, assessment and actions with the FCA, according to the statement.

The FCA declined to comment. Wise said in the statement it will provide an update when appropriate but for now “does not intend to make any further comment given the ongoing regulatory investigation.”