Wise co-founder Kristo Kaarmann told to hire tax advisers

Kristo Kaarmann was penalised for late payment of his personal tax bill in 2017/18

Credit: Jake Farra

Directors at the money transfer company Wise have told its billionaire chief executive to hire professional advisers after he was fined for defaulting on his taxes.

Wise said its board had launched a review after Kristo Kaarmann, its co-founder, was penalised for late payment of his personal tax bill in 2017/18.

The Telegraph revealed in September that Mr Kaarmann had been fined £365,651 by HMRC for failing to heed repeated reminders to pay a tax bill.

The fine raised questions about whether the Estonian-born executive could face censure under the Financial Conduct Authority (FCA)’s senior managers regime.

Matt Briers, Wise’s chief financial officer, said the board had completed a “thorough review” of the matter and recommended that he appoint tax experts to help manage his finances.

Mr Briers said: “We take this really seriously. We completed a thorough review and recommended that Kristo appoint professional advisers. Kristo has welcomed this oversight and is using a tax adviser. We’ve taken the right steps.”

He said the company had informed the FCA and added: “As you’d expect, in the dialogue we have with our regulators we would and should notify them of these events and the governance process.”

Legal experts have warned that the FCA could sanction Mr Kaarmann, although he is believed to have disclosed the situation to the regulator. 

Tim Thomas, the head of financial services regulation at law firm Richardson Lissack and a former FCA lawyer, said: “One assumes [the FCA] was satisfied that either it could not consider the conduct as being relevant or that there were circumstances which mitigated the conduct to an extent that that no action was warranted."

The FCA said it did not comment on individual cases.

It came as Wise shares jumped 8pc after the company boosted full-year sales forecasts. The company, which allows consumers and businesses to exchange different currencies at a lower cost than banks, had last month disappointed investors by saying it expected revenue growth to be in the “low to mid” 20pc range.

On Tuesday, it said it now expected growth to be in the “mid-to-high 20s”. 

Wise, valued at £8.3bn, was one of the largest tech floats of the year when it went public in a direct listing in July.

It said it now has 3.9m customers, up from 3.2m a year ago, and revenue in the first half of the year had grown by 33pc to £256.3m despite recently cutting fees. Half-year profits fell from £20m to £18.8m, largely due to the costs of its listing in July.

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