Kristo Käärmann, chief executive of payments company Wise, is due to take a sabbatical later this year despite a continuing regulatory investigation over a deliberate default on tax payments.
In a blog posted on Wednesday, Käärmann said he would take an “extended Wise sabbatical” between September and December to spend time with his family.
“When I first started the company 12 years ago, it would have been unimaginable for me to take any time away from the team and our customers,” Käärmann said. “I am excited that Wise has reached this point, where I can take full advantage of our sabbatical policy.”
Harsh Sinha, who has been Wise’s chief technology officer since 2015 after stints at PayPal and eBay, will stand in for Käärmann in the interim. Wise said sabbaticals were normally six weeks long, and were offered after four years at the company.
Last June, Wise disclosed that the UK’s Financial Conduct Authority was investigating Käärmann, after HM Revenues & Customs fined the Estonian entrepreneur £365,651 related to an outstanding tax bill of £720,495 for the 2017-18 tax year.
The FCA’s probe was opened because of the entrepreneur’s status as an “approved person” who the regulator must deem “fit and proper” to do their job.
Wise confirmed the investigation was ongoing and said the announcement was unrelated to it.
The company, formerly known as TransferWise, was feted for its choice to remain in London when it listed in July 2021 as the UK market has faced pressure from more liquid capital markets, particularly in the US.
Unlike many of its rivals, it reported several years of profits before listing. Rising interest rates and higher prices helped to boost revenue in the fourth quarter of 2022 by 83 per cent to £279.5mn.
But its shares have been hit by a broader rout among fintechs amid surging inflation, investor wariness and dropping consumer sentiment. They are down more than 40 per cent since listing.
In August last year, the fintech’s subsidiary in the United Arab Emirates was also fined by its regulator over failures in its anti-money laundering controls.
The FCA declined to comment.
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