International money transfer giant Wise said in a stock market statement on 27 June that the Financial Conduct Authority has opened an investigation into its co-founder chief executive, Kristo Kaarmann, after he was fined by HMRC for deliberately defaulting on his taxes.

In September 2021, HMRC had updated its published list of individuals and businesses receiving penalties for a deliberate default regarding their tax affairs.

Co-founder and chief executive officer of Wise, Kristo Kärmann was included on the list and will remain so for 12 months from its publication.

Wise said that following the inclusion of the CEO's name in this list, the Board of Wise conducted an investigation with support from external legal counsel. The investigation concluded in Q4 2021, and the Board shared details of its findings, assessment and actions with the FCA.

In relation to this matter, the FCA has commenced an investigation regarding the regulatory obligations and standards to which Kristo is subject. Kristo intends to cooperate fully with the FCA in its investigation, the statement said.

David Wells, chair, said: "The Board takes Kristo's tax default and the FCA's investigation very seriously. After reviewing the matter late last year the Board required that Kristo take remedial actions, including appointing professional tax advisors to ensure his personal tax matters are appropriately managed. 

"The Board has also shared details of its own findings, assessment and actions with the FCA and will cooperate fully with the FCA as and when they require, while continuing to support Kristo in his role as CEO."

Wise further said that at this time, it does not intend to make any further comment given the ongoing regulatory investigation, as and when appropriate providing an update.