Kemi Badenoch meets with Revolut to discuss fears that it might leave the UK

Kemi Badenoch is the UK’s Business Secretary and she has requested an urgent meeting with Revolut. She fears that the technology company, worth $33bn, may leave the UK due to frustration over high taxes and redtape.

The Department for Business and Trade has confirmed that they want to meet Nikolay Storonsky. He is the chief executive of Revolut. This comes just days after Storonsky attacked Britain’s extreme bureaucracy.

In recent weeks, officials in France and Spain have been courting Revolut. The company is based in London. bosses are growing increasingly frustrated with the delays in obtaining a UK banking license.

Revolut’s spokesman said, “We are a British company and London our home.” However, the spokesman didn’t respond to a question about whether Revolut will accept a request from the Business and Trade Department for a meeting.

Mr Storonsky criticized Britain in a series of tweets on Friday. He said it was difficult to do business there and that he would never list his company in London.

Mr Storonsky stated: “In Britain, there are higher taxes and a very bureaucratic regulator.”

Revolut’s chief executive launched another torrent of criticism Sunday, criticizing the Financial Conduct Authority (FCA) for its delays in issuing it a bank licence. The company believes that this license is crucial to offering loans and other services as well to its 5,8 million UK clients.

“We are not the ones who should be worried, but the current banking crisis,” says a regulator.

Competing challenger banks Monzo and Starling have full UK banking licenses, unlike Revolut. Since about two years, the company has pursued an application to the FCA and Prudential Regulation Authority.

Revolut is the UK’s top fintech company in 2021 , after it received a $33bn funding round. In the past year, it has surpassed Checkout.com to become Europe’s best start-up.

Schroders, for example, reportedly reduced the value of their PS10.1m stake in April by almost half. Revolut may have lost $15 billion in value over the past two years.

Revolut has been in the spotlight recently after its auditor raised concerns about its finances. It was late filing annual accounts at Companies House.

BDO, UK’s 5th largest accounting firm said in March that it was unable to satisfy itself regarding the completeness of and the occurrence for certain revenues for the period ended 31 December 2021.

Auditors reported that they could not verify £477m of Revolut’s £636m sales for the past year.

BDO stated that Revolut’s internal IT system was “not able” to provide “sufficient appropriate assurance” regarding revenue streams, including those from its Foreign Exchange and Wealth Department. This includes cryptocurrency trading revenues.

BDO did not issue any warnings about Revolut’s ability to remain a viable business. The auditors were able verify 100% of the cash balances that third parties held for customers.

Mr Storonsky accused the regulator on Friday of placing pressure on BDO, and claimed that the IT problem has since been resolved.

He said that “the regulators pressed BDO, and as a consequence it was more rigorous and risk-averse and therefore delayed the accounts because the regulator was on the back of them.”

Revolut has been the latest company in recent months to criticise Britain’s trading environment.

Softbank, a Japanese investment fund that owns Arm, a computer chip designer, rejected Rishi Sunak’s personal appeals in March to list the company in London , opting for the US instead.

Peter Jackson, the founder of Betfair, Paddy Power and Flutter parent group, chose to list in New York after claiming that the US provided him with a “greater pool of liquidity” than the UK.

The Financial Conduct Authority is planning to revamp British market listing regulations in order to attract more foreign companies and investors to London.