When the payments company Wise floated on the London Stock Exchange last summer it propelled its founders into the ranks of Britain’s richest people. But Kristo Käärmann, one of the Estonian pair who launched the firm, soon found himself on an altogether less desirable list: named and shamed as a tax defaulter by HM Revenue and Customs. Käärmann was identified as having failed to pay £720,000 in tax, joining a series of restaurants, builders and even a strip club who had all fallen foul of the tax authority. HMRC describes the defaults as “deliberate”, but Wise insists it was a matter of keeping his “personal admin in order”. With the UK’s Financial Conduct Authority investigating, that personal admin breach could end up being even more costly for a man whose innovation made him a darling of London’s tech scene. The FCA has the power to remove his approval to be a senior manager. If they were to do this, that would make it difficult for him to carry on leading the firm he built. Käärmann grew up in Tallinn, Estonia’s capital, and attended university in its second city, Tartu, but the idea for Wise, originally known as Transferwise, came when he was working in London for Deloitte, one of the big four accountancy firms. When he tried to transfer his Christmas bonus to Estonia he was left out of pocket by £500 because of an unfavourable exchange rate, with a £15 fee adding insult to injury. That inspired him to set up an informal arrangement with an acquaintance from Estonia to mirror transfers on either side of the border – avoiding the ripoff. The acquaintance, met serendipitously at a party in 2007, was Taavet Hinrikus, the second employee of Skype, a tech unicorn – the name for startups worth more than $1bn – bought by Microsoft that also has Estonian roots. Together the pair founded Wise in 2011 with backing from investors including Sir Richard Branson, Skype’s Niklas Zennström and Peter Thiel, a co-founder of PayPal who specialises in investments in technology companies such as Facebook as well as rightwing political causes. Wise is based in Shoreditch in east London, the capital’s fintech hub, and it has continued to grow. While the company will publish its first full-year results as a public company on Tuesday, it said in a January trading update that it counted 4 million customers making transactions in the last three months of 2021. They paid it £150m in revenues, against a transaction volume of almost £21bn. Wise reached a valuation of almost £12bn in September, making both co-founders billionaires on paper. However, the investor shift away from growth stocks amid fears of higher interest rates has dampened enthusiasm, and the payments company started the week at £3.9bn, less than half the valuation on its London market debut a year ago. Käärmann, 41, has retained more power over Wise than majority shareholders generally do when listing shares in the UK: a controversial US-style share structure gives him almost half of the votes at company meetings. Käärmann has not publicly commented on the personal tax matter, but in a statement Wise said: “Kristo intends to cooperate fully with the FCA in its investigation.”