Welcome to The Fintech Recordsdata, your weekly roundup from FN’s fintech correspondent Ryan Weeks, maintaining you recent with the most recent developments in monetary tech and innovation
The British authorities had a hand in selling hyperlinks between the Metropolis of London and a tycoon who’s at present being probed by Indian authorities over allegations of monetary misconduct.
Kapil Wadhawan, chair of Wadhawan World Capital, was arrested in India on 27 January earlier than being granted bail final week. He’s being investigated over claims he helped siphon cash out of Dewan Housing Finance Company, Wadhawan’s dwelling loans subsidiary, utilizing a community of offshore accounts, in response to a report within the Financial Occasions. Kapil Wadhawan and DHFC couldn’t be reached for remark.
Fintech Recordsdata can reveal, nevertheless, that his enterprise was as soon as in favour with the Division for Worldwide Commerce and the Metropolis of London Company, two British authorities our bodies.
A September 2018 commerce delegation organised by the pair noticed a gaggle of 11 UK fintech companies, along with Charles Bowman, Lord Mayor of London on the time, journey to Mumbai, Bangalore and Delhi in a bid to spice up commerce hyperlinks. The fintech corporations in attendance included the identification verification start-up Onfido, the worker lending enterprise Wage Suits, and Worldpay, the funds agency.
Wadhawan World Capital hosted a reception for the delegation at which its funding plans within the UK market had been mentioned, in response to an individual accustomed to the matter.
Different sources with information of the journey confirmed that neither DIT nor the Metropolis of London Company had been conscious of any points with Wadhawan on the time. The claims towards Wadhawan first surfaced in an Indian weblog referred to as Cobrapost in early 2019.
The turmoil at far-flung Wadhawan has brought on vital complications in London.
The enterprise started investing in British fintech start-ups via a UK subsidiary in 2017, handing out sizable cheques to the lenders Zopa and Neyber. The previous accepted Kapil Wadhawan’s resignation from its board just a few days after his arrest in India.
DHFC, Wadhawan’s subsidiary, listed a so-called “masala bond” on the London Inventory Alternate in April 2018. Monetary Information not too long ago reported that the London-based fund supervisor Jupiter Asset Administration invested on this and different DHFC bonds, and is at present nursing paper losses of round $15m on the holdings.
On the time of the delegation to India, strengthening international commerce hyperlinks was excessive on the Conservative authorities’s agenda.
In a Metropolis of London Company press launch printed forward of the journey, Charles Bowman mentioned: “India is the fourth largest international investor within the UK, and ties between our two international locations are rising. However there may be a lot extra we will do collectively, notably within the space of fintech, the place UK experience completely matches the wants of India’s rising digital market.”
Bowman couldn’t be reached for remark.
Since nicely earlier than the UK voted to depart the European Union in 2016, the federal government’s commerce departments and envoys have been lavishing consideration upon the much-vaunted fintech sector. However what begins in an enthusiastic blaze of publicity can typically finish in PR blowback.
The journey to India in 2018 wouldn’t be the primary commerce delegation to return below scrutiny. The Occasions reported late final 12 months on the case of Jennifer Arcuri, a private good friend of the UK Prime Minister Boris Johnson, who the Occasions mentioned was given entry to commerce missions overseen by Johnson throughout his time period as Mayor of London between 2008 and 2016.
Arcuri advised FN she has “remained resilient” regardless of the shut media scrutiny, and is “publicly dedicated” to the reason for tech innovation within the UK. She has now utilized to grow to be chair of UK fintech physique Tech Nation. For his half, Johnson insists his dealings with Arcuri had been performed with “full propriety”.
Propriety is an efficient phrase. Selling the UK’s fintech sector and fostering hyperlinks with buyers overseas is laudable work, however that solely underlines the significance of constructing certain everybody concerned is following all correct procedures always.
And if an investor is providing cash, it is very important perceive the place it’s coming from.
In any case, no-one was ever damage by an excessive amount of due diligence.
Get in contact Drop me a word at email@example.com or discover me on Twitter or LinkedIn. Received any information suggestions or suggestions (good or unhealthy)? You too can contact the FN information desk through firstname.lastname@example.org
Right here is the Sky Information article on Neyber, a fintech lender that’s reportedly in talks with BDO over a variety of choices, together with a sort of insolvency generally known as a pre-pack administration.
And right here is our piece on how one in every of Jupiter Asset Administration’s star fund managers misplaced $15m betting on DHFC bonds.
Sky Information additionally broke the information that JPMorgan is getting near launching a digital financial institution for UK customers. The brand new service may launch as quickly as this 12 months and can embody present and financial savings accounts, in addition to loans.
The Monetary Occasions later reported that JPMorgan is lining up Clive Adamson, former head of supervision on the Monetary Conduct Authority, as chair of the brand new digital financial institution.
The Wall Road Journal stories that Morgan Stanley’s mammoth $13bn bid E-Commerce exhibits the financial institution’s confidence in spreading prosperity.
But extra consolidation appears set to hit the fintech sector with WSJ additionally reporting that Intuit is nearing a deal to amass free credit score scoring agency Credit score Karma for $7bn.
Lastly, right here’s FT Alphaville’s newest on when “commission-free buying and selling” isn’t actually free.
Signal as much as The Fintech Recordsdata
To contact the writer of this story with suggestions or information, e-mail Ryan Weeks