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Wise posts higher profits amid watchdog probe into founder’s tax default

·2-min read
The bosses of Wise
The bosses of Wise

Money transfer group Wise has unveiled a rise in profits and surge in customers as its boss faces a City watchdog investigation after defaulting on his taxes.

The group, which floated in a record-breaking London listing last July, reported pre-tax profits of £43.9 million for the year to March 31, up from £41.1 million the previous year, as revenues grew 33% to £559.9 million.

Its customer base grew 29% year on year to 4.6 million in the final three months, with the group transferring 40% more money over the year, at £76 billion.

Wise said it aims to grow revenues by 30% to 35% during 2022-23 after a “strong start” to its new financial year.

But the figures come after the group revealed on Monday that its billionaire co-founder and chief executive Kristo Kaarmann is being investigated by the Financial Conduct Authority (FCA) over his status as a so-called deliberate tax defaulter.

Mr Kaarmann was named last September on a list of people that HM Revenue & Customs (HMRC) had fined for deliberately defaulting on his taxes.

He was fined £365,651 by HMRC relating to an outstanding bill of £720,495 for the 2017-18 tax year.

Wise finished its own internal probe into the default, with help from external legal advisers, and shared its findings and the measures taken with the FCA.

Wise – formerly known as TransferWise – is a regulated firm and Mr Kaarmann is an approved person under the FCA’s senior managers regime.

The results are its first set of full-year figures as a listed company, after it floated on the London Stock Exchange last summer in what was one of the biggest flotations of the year and the largest London tech listing in history.

Mr Kaarmann still owns 19% of the firm.

He said in the group’s results: “Last year was notable for our listing, but the work we do to continue to build our business cannot and will not stop.

“We have, as to be expected, work to do to continue to develop our controls, processes and operations so that we can move money around the world instantly, for everyone.”

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