Wise Founders in Public Feud Over Controversial Two Tier Share Plan and US Listing Move

A high profile dispute has erupted at Wise the cross border payments group formerly known as Transferwise as co founders Kristo Kaarmann and Taavet Hinrikus exchange accusations over a contentious plan to extend the companys dual share structure and relocate its main market listing to New York. The fallout follows a period of mounting tension within Wise one of the UKs most celebrated fintech success stories of the last decade.

Hinrikus who helped build Wise into an £11 billion powerhouse after he and Kaarmann founded it in London in 2010 is fiercely resisting a proposal to prolong the dual class share system for an extra decade. This structure grants outsized voting rights to Kaarmann and select insiders while most shareholders have less influence. When Wise floated in 2021 investors were assured such a governance regime would end by July 2026. Alleging the plan had been hidden amid documents about a shift to the New York Stock Exchange Hinrikus accused Kaarmann of undermining shareholder democracy and called for fellow investors to reject the bundled proposals unless they are separated for individual votes.

Wise management has rebutted these claims and insists a majority of investors back both the share structure extension and the move from London to New York. Defending the proposals chairman David Wells pointed to the successful use of dual class models in US technology firms and noted that shareholders were overwhelmingly in favour. Kaarmann who holds just over 18 per cent of the economic stake but close to 55 per cent of voting power through vote heavy B shares argued the changes will bolster the business’s future growth particularly as Wise looks to boost its profile and access a wider investor pool in America.

The controversy has exposed fault lines between founders the board and City investment houses which often view dual class structures as obstacles to robust corporate governance. Traditionalists argue for a one share one vote standard seeing excessive centralised control as a threat to transparency and long term credibility. A campaign group representing these investors has lately emerged to promote better governance in response to Wise and other cases where founder power has been entrenched via dual class holdings.

The proposed shift to New York sent shockwaves through the London market already jittery from UK listed firms relocating abroad. Wise’s listing move will mean it no longer seeks entry to the FTSE 100 and raises concerns about Londons ability to retain major international tech players. Meanwhile concerns have also surfaced over the governance record of Kaarmann who previously faced regulatory fines for tax related oversights and scrutiny of leadership standards.

The forthcoming vote scheduled for 28 July will be pivotal. Both A and B shareholders must approve the plan including a 75 per cent supermajority under a court sanctioned scheme of arrangement. Major proxy firms such as Glass Lewis and ISS have recommended in favour of the proposal and investors like Baillie Gifford and Andreessen Horowitz will play a crucial role in determining the outcome. The row over Wisess governance and future direction could mark a turning point not just for the payments disrupter but for the UK’s standing as a home for ambitious tech driven enterprises.