British fintech boss accused of ‘backdoor' power grab in row over US move

Telegraph

6 days ago

The boss of British fintech champion Wise has been accused of a 'backdoor' power grab over claims he is hijacking a crunch shareholder vote to tighten his grip on the company.
Kristo Käärmann, chief executive of Wise, has been attacked by his former partner for allegedly 'blindsiding' investors with a proposal that will award him extra rights.
Taavet Hinrikus, who co-founded Wise with Mr Käärmann in 2010, told The Telegraph that the measures were 'buried' in a plan to move the £11bn payments business's main listing to the US, which will go to a shareholder vote on Monday.
As well as proposing the shift from London to New York, Wise is seeking shareholder approval for a 10-year extension to super-voting shares held by a handful of insiders, including Mr Käärmann.
Those shares, which represent 90pc of the total voting rights at Wise, had been set to expire in July 2026.
Mr Hinrikus, 44, has claimed that bundling the two issues into one vote is 'entirely inappropriate and unfair', as he urged other investors to reject the plan.
He said: 'The fact that most of the investors were surprised or blindsided is telling. Most of them agree that this governance change does not make Wise a better company.'
Growing rift
The row reveals a stark rift between Mr Hinrikus and Mr Käärmann, who launched the business together in 2010.
Mr Hinrikus previously served as chief executive of Wise until 2017. He then served as chairman until Wise's listing in London in 2021 before stepping down.
Mr Hinrikus said bosses appeared to be seeking to tighten their grip on Wise 'through the backdoor'.
Super-voting shares are widely used by Silicon Valley founders to gain extra control over the business they set up. For example, Mark Zuckerberg holds ultimate voting control at Meta thanks to his special shares.
However, critics argue they can undermine shareholder democracy and hand too much power to the chief executive.
Mr Käärmann, who is worth close to £2bn, currently controls more than 50pc of the voting rights in the company but owns just 18pc of shares.
Meanwhile, Mr Hinrikus has about 12pc of voting control and a 5pc overall stake, worth more than £500m.
The vote on Monday requires a 75pc majority to pass.
Dissolving bond
Mr Käärmann, 44, and Mr Hinrikus founded Wise – originally Transferwise – after bonding over their shared bugbear of sending money back home to Estonia.
The business aimed to make sending money overseas cheap and painless. It has since expanded into savings products and spending cards.
After attracting venture capital from Silicon Valley investors, the company went public at a valuation of around £8bn. It is now worth close to £11bn and reported profits before tax of £564.8m last year.
In June, Mr Käärmann confirmed Wise planned to shift its main listing to New York while maintaining a secondary listing in London. He said this would help 'accelerate our mission' and bring 'capital market benefits to Wise and our owners'.
The loss of such a substantial technology business risks fuelling fears of a death spiral for the London Stock Exchange, which has struggled to hang on to blue-chip listings and suffered an exodus of companies.