Wise co-founders clash over New York listing plans
A plan to move Wise’s primary listing from London to New York has been thrown into doubt after one of the firm’s co-founders urged shareholders to vote against the move.
Taavet Hinrikus, who served as chief executive of the London fintech from its founding in 2011 until 2017, warned he was “deeply troubled” over the terms of the plan scheduled for shareholder approval next week.
Hinrikus’ investment firm Skaala, through which he continues to control a 5 per cent stake in the company, expressed its opposition to a clause in the vote which would hand a 10-year extension to the outsized rights of certain shareholders including fellow co-founder Kristo Käärmann, a move which it said demonstrated a “lack of transparency.”
The special voting rights were set to expire in 12 months’ time, with Skaala warning the extension “significantly exceeds standard practice.”
“We are concerned about its impact on the future value of the company, its reputation and on the wider shareholder body,” Skaala said, adding: “Wise owners deserve governance structures that enhance value, not entrench power.”
“The failure to clearly flag this major governance change upfront risks diminishing trust and compromising the business integrity crucial for a payments provider. Owners deserve transparent and forthright disclosure, particularly when their voting power is at stake.”
Skaala instead urged Wise to split the shareholder resolution into two separate votes rather than force an “all or nothing” vote on the combined proposal. “It is entirely inappropriate and unfair to wrap these distinct issues together,” the firm said, adding it was still supportive “in principle” of the US listing.
Wise co-founders go head-to-head
The excoriating missive laid bare a fracturing in relations between Wise’s two co-founders, two of the largest shareholders in the business, who have not previously clashed over the strategy of the £12bn fintech giant. Hinrikus left the firm in 2021, while billionaire Käärmann remains the firm’s chief executive.
Skaala said its views on the proposal were shared with several other shareholders, in signs the vote could be on a knife edge. But Käärmann has insisted shareholders consulted were “overwhelmingly in favour” of the proposal. A supermajority of 75 per cent of votes is needed to get the plan over the line.
Its success could hinge on backing from Edinburgh-based Baillie Gifford, which controls a 11.3 per cent stake worth £1.2bn. A Baillie Gifford spokesperson declined to comment on its voting intention, but the firm last month opposed a takeover of London-listed property firm Assura by New York private equity business KKR.
Wise last month dealt a blow to the London Stock Exchange after the money transfer business unveiled its plans to shift its primary listing to the US, which it said would give it “better access to the world’s deepest and most liquid capital market”.
Shareholder advisory firms Glass Lewis and ISS have both backed Wise’s proposals. In a statement, Wise urged shareholders to support the plans, arguing they were “essential to ensuring our continued successful performance”.