Kristo Käärmann, chief executive of payments firm Wise, is expected to take a sabbatical later this year despite an ongoing regulatory investigation into a deliberate default on tax payments.
In a blog posted on Wednesday, Käärmann said he would be taking an “extended 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 time away from the team and our customers,” said Käärmann. “I’m thrilled 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 working at PayPal and eBay, will replace Käärmann in the meantime. Wise said sabbaticals typically lasted six weeks and were offered after four years at the company.
Last June, Wise revealed that the UK’s Financial Conduct Authority was investigating Käärmannafter HM Revenues & Customs fined the Estonian businessman £365,651 in relation to an outstanding tax bill of £720,495 for the 2017-18 tax year.
The FCA investigation was opened due to the entrepreneur’s status as an “authorized person” who the regulator must deem “fit and fit” to do his job.
Wise confirmed the investigation was ongoing and said the announcement was unrelated to it.
The company, formerly known as TransferWise, was celebrated for his choice to remain in London when it was listed in July 2021 as the UK market faced pressure from more liquid capital markets, particularly in the US.
Unlike many of its rivals, it posted several years of profit before going public. Rising interest rates and higher prices helped boost Q4 2022 revenue by 83%, to £279.5m.
But its stock has been hit by a broader rout among fintechs due to rising inflation, investor wariness and declining consumer sentiment. They are down more than 40% since listing.
In August last year, the fintech’s UAE subsidiary was also fined by its regulator for failures in its anti-money laundering checks.
The FCA declined to comment.
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