Christa Kaarman, CEO and co-founder of Wise.

Eoin Noonan | Sports file | Getty Images

The CEO of the technology firm Wise worth 3.9 billion pounds ($ 4.8 billion) is being investigated by British regulators after the tax authorities found that he had not paid a tax bill of more than 720,000 pounds.

Christa Kaarman, who co-founded Wise in 2011, was recently fined £ 365,651 by Her Majesty’s tax and customs service – the UK government agency responsible for tax collection – for failing to meet a tax bill in 2018.

A company spokesman at the time said Kaarman was late in submitting his personal tax return for the 2017/18 tax year, but has since paid the debt along with “significant” fines for late filing.

The UK’s Financial Control Office has launched an investigation into the matter, Wise said in a statement on Monday. Regulators are finding out whether Kaarman has complied with regulatory obligations and standards.

The FCA declined to comment on the investigation.

Wise said his council has hired outside lawyers to help investigate Kaarman’s tax violations. The investigation was completed in the fourth quarter of 2021, and its results were reported to the FCA.

David Wells, chairman of the board of Wise, said the company’s management takes Kaarman’s tax default and FCA investigation “very seriously”.

“Following consideration of this issue late last year, the Council required Christo to take steps to remedy the situation, including the appointment of professional tax advisers to ensure proper management of his personal tax matters,” Wells said.

“The Board has also shared details of its findings, assessments and actions with the FCA and will cooperate fully with the FCA as necessary, continuing to support Christ in his role as CEO.”

The investigation could have significant implications for Wise and his supervisor. Kaarman may be forced to resign and stop working in the industry if regulators decide he will not pass the “suitability and propriety” test.

A Wise spokesman declined to comment on further FCA investigations.

Wise shares barely moved in the news on Monday. The company’s shares have fallen sharply since debuting in July 2021, losing about 57% of their value.

Wise, which competes with companies such as PayPal and Western Union, made a name for itself by fighting hidden payments in foreign currency, and quickly became a favorite of the British startup scene. Since then, the company has branched out into other areas of finance, including banking and investment.

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