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Tax Violation: FCA Opens Investigation on Wise’s CEO after £365k Fine

Date:

The Financial Conduct
Authority (FCA), the United Kingdom’s financial industry watchdog, has opened
an investigation into the tax violation by Kristo Kaarmann, the Chief Executive Officer of
Wise.

Wise, formerly called
TransferWise, is a London-based financial technology company.

In a list first published in September 2021, the FCA listed
Kaarmann among those it had labelled as ‘deliberate tax defaulters’.

According to the list,
Kaarmann defaulted on £720,495 between April 6, 2017 and April 5, 2018.

The CEO of Wise was
subsequently fined £365,651 by Her Majesty’s Revenue and Customs, a
non-ministerial department of the UK Government responsible for the collection
of taxes, among other duties.

However, according to a
spokesperson for Kaarmann, the Estonian-born billionaire was late in submitting
his personal tax returns despite several reminders from the tax authority.

“His tax returns have
since been completed, and he paid substantial late filing penalties,” the
spokesperson was quoted to have said.

Nonetheless, the FCA
with its investigation wants to find out whether Kaarmann failed to meet
regulatory obligations and standards, CNBC reports.

Cooperation with the FCA

The outlet reported that
Wise in a statement said its Board of Directors (BOD) shared its findings on
the matter with the UK watchdog.

David Wells, the Chairman of
BOD at Wise, said the company tasked Kristo to take up some remedial measures.

These measures, among
others, included hiring professional tax advisors to efficiently
manage his personal tax matters.

Wise, which posted a 34% year-on-year jump in its revenue for the third quarter of the fiscal year of
2022, said it will fully cooperate with the FCA.

Additionally, the fintech company said it is supporting Kaarmann in his capacity as the company’s Chief
Executive.

Meanwhile, Wise recently
partnered with
Max, an Israeli
payments firm, to open up the latter’s customers “to cheaper, faster transfers abroad at
their fingertips from the convenience of the Max app.”

Wise, which made the
announcement in April, said the collaboration will allow Max customers to send
money abroad in 32 currencies such as the United States dollar, Euro, Pound
Sterling and Canadian dollar.

Furthermore, the company in February disclosed
plans
to hire 150 employees
to man its office in Singapore. The number almost doubles its current headcount
in the Asia Pacific hub.

The Financial Conduct
Authority (FCA), the United Kingdom’s financial industry watchdog, has opened
an investigation into the tax violation by Kristo Kaarmann, the Chief Executive Officer of
Wise.

Wise, formerly called
TransferWise, is a London-based financial technology company.

In a list first published in September 2021, the FCA listed
Kaarmann among those it had labelled as ‘deliberate tax defaulters’.

According to the list,
Kaarmann defaulted on £720,495 between April 6, 2017 and April 5, 2018.

The CEO of Wise was
subsequently fined £365,651 by Her Majesty’s Revenue and Customs, a
non-ministerial department of the UK Government responsible for the collection
of taxes, among other duties.

However, according to a
spokesperson for Kaarmann, the Estonian-born billionaire was late in submitting
his personal tax returns despite several reminders from the tax authority.

“His tax returns have
since been completed, and he paid substantial late filing penalties,” the
spokesperson was quoted to have said.

Nonetheless, the FCA
with its investigation wants to find out whether Kaarmann failed to meet
regulatory obligations and standards, CNBC reports.

Cooperation with the FCA

The outlet reported that
Wise in a statement said its Board of Directors (BOD) shared its findings on
the matter with the UK watchdog.

David Wells, the Chairman of
BOD at Wise, said the company tasked Kristo to take up some remedial measures.

These measures, among
others, included hiring professional tax advisors to efficiently
manage his personal tax matters.

Wise, which posted a 34% year-on-year jump in its revenue for the third quarter of the fiscal year of
2022, said it will fully cooperate with the FCA.

Additionally, the fintech company said it is supporting Kaarmann in his capacity as the company’s Chief
Executive.

Meanwhile, Wise recently
partnered with
Max, an Israeli
payments firm, to open up the latter’s customers “to cheaper, faster transfers abroad at
their fingertips from the convenience of the Max app.”

Wise, which made the
announcement in April, said the collaboration will allow Max customers to send
money abroad in 32 currencies such as the United States dollar, Euro, Pound
Sterling and Canadian dollar.

Furthermore, the company in February disclosed
plans
to hire 150 employees
to man its office in Singapore. The number almost doubles its current headcount
in the Asia Pacific hub.

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