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Wise boss fined by City regulator for ‘significant tax issue’

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Kristo Käärmann, chief executive of London-listed fintech Wise, has been fined £350,000 for failing to tell the City regulator about a “significant tax issue”.

The Financial Conduct Authority (FCA) said the issue was relevant to its “assessment of Mr Käärmann’s fitness and propriety” and he had therefore breached a senior manager conduct rule.

Käärmann paid an HMRC fine worth £365,651 in February 2021 for “deliberately failing” to inform the tax authorities about a capital gains liability incurred after selling shares worth £10m in 2017.

But he did not inform the FCA about this issue between February 2021 and September 2021, when he was added to HMRC’s public tax defaulters list.

Käärmann would have been fined £500,000, but qualified for a 30 per cent discount after agreeing to resolve the issues.

“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” said Therese Chambers, joint executive director of enforcement and oversight at the FCA.

“It should have been obvious to Mr Käärmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety,” she added.

Käärmann said in a statement: “After several years and full co-operation with the FCA, we have brought this process to a close.

“I remain focused on delivering the mission for Wise and achieving our long-term vision for being ‘the’ network for the world’s money.”

Wise stressed that the FCA had cleared Käärmann to continue in his job. He co-founded the money transfer business in 2011 and took it public on the London Stock Exchange a decade later.

David Wells, chairman of Wise, commented: “Following the inclusion of Kristo’s name on HMRC’s list in September 2021, the board conducted its own investigation and assessed that Kristo remained fit and proper to continue in his roles at Wise.

“The board also required him to take remedial actions to ensure that his personal tax affairs are appropriately managed and is satisfied that these actions were taken.”

Wise’s stock price was broadly flat in early trading on Monday.