Wirecard fallout: Lithuania’s Central Bank Revokes Fintech Finolita’s License
Lithuania’s central bank has revoked the license of UAB Finolita Unio, a local Fintech, on charges of violating anti-money-laundering and counter-terrorist financing rules. Finolita had received a license in 2019 from the Lithuanian central bank to execute “payment transactions” and issue, distribute and redeem electronic money.
As per an FT report, the Bank of Lithuania revoked Finolita
Unio’s license following allegations that the Fintech was used to steal more
than €100m from the German payments company Wirecard. The central bank said the
amount was stolen from Wirecard before the company announced bankruptcy last
year. Once a top Fintech based in
Germany, Wirecard collapsed in a spectacular fashion. Long plagued by
accusations of malfeasance, and denial by the firm, Wirecard imploded when
accountants uncovered a small amount of missing funds totaling around €3
billion.
“Finolita had treated anti-money-laundering and
counter-terrorist financing rules irresponsibly,” the central bank said.
The Finolita case is a wake-up call for the central bank to
scrutinize and monitor the new-age Fintechs that mushroomed in Lithuania
following the UK’s departure from the EU. Lithuania has the highest number of
fintechs in the entire European market.
The Lithuanian central bank was said to have run a formal
investigation in late 2020 and found out issues at Finolta soon after the
German financial regulator acknowledged problems at Wirecard.
The probe found that Wirecard had granted a €100m loan in
March 2020 to a subsidiary of Singapore-based Senjo Group, Finolita’s parent
company. The loan was processed by Finolita and channeled to Wirecard’s COO,
Jan Marsalek, who remains on the run from authorities. Philippine authorities
have filed a criminal complaint against Marsalek. The money was supposedly held
in trust in two Philippine lenders to cover trading risks carried out by third
parties on Wirecard’s behalf, as per media reports.
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