[HN Gopher] Revolut CFO quits after auditor BDO warning
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Revolut CFO quits after auditor BDO warning
Author : haasted
Score : 74 points
Date : 2023-05-13 20:00 UTC (3 hours ago)
(HTM) web link (www.standard.co.uk)
(TXT) w3m dump (www.standard.co.uk)
| rchaud wrote:
| CFO's comments to The Guardian in December 2022 (the article also
| mentions the auditor's concerns)[0]:
|
| > Mikko Salovaara, its chief financial officer, told the Guardian
| in an interview that the company was on the brink of getting a
| banking licence from City regulators: "I think we're at the very
| last stages. Really at the finish line." Salovaara said the UK
| licence was a step towards achieving Revolut's aim of becoming a
| "truly global bank". It would allow the company to offer "an
| increasing set of services to our customers, particularly
| credit."
|
| Sounds like another Wirecard. There's even the cliched startup
| quote "we want to be the Amazon of banking". WC wanted to be the
| Paypal of Europe. Amazing how far you can get before you've
| earned a single cent of profit!
|
| [0] https://www.theguardian.com/business/2023/mar/01/uk-
| fintech-...
| exizt88 wrote:
| There's a huge leap between fucking up your accounting systems
| and doing outright fraud. This isn't even close to what WC was
| doing, at least from the available information.
| rchaud wrote:
| If you're providing financial services in a heaivily
| regulated industry, it's not that big of a leap. The company
| has a pending application for a UK banking license for the
| past 28 months; the turnaround time for that in the UK is 12
| months. Yet even now, they have filed their accounts several
| months late, _and_ without a clean bill of health from the
| auditor.
|
| The CFO of all people should have advised withdrawal of their
| application until internal controls were sorted. That they're
| resigning instead doesn't bode well.
|
| From the FT, their UK operations chief departed as well: http
| s://www.ft.com/content/f27f6b80-d32d-4913-991d-c512f6e90...
| skippyboxedhero wrote:
| It is also worth pointing out the original article also
| accompanied an implicit threat to take their company to the
| US if they weren't given a banking licence immediately.
|
| The stuff with the accounts already existed, apparently the
| regulators found these issues when examining their
| suitability for the licence (I have read from sources
| online that there is a very significant issue with revenue
| recognition, as in a percentage of revenue significantly
| above 50% couldn't be matched in their systems), but the
| resignations came after they went to the media and tried to
| bounce the BoE into giving them a licence (spoiler: what
| the CFO is quoted as saying it is total bollocks, they
| aren't close to getting a licence).
|
| The media furore in the UK from execs about insufficient
| levels of executive pay unfortunately has created the space
| for opportunism like this.
| exizt88 wrote:
| I don't know if average turnaround time applies here,
| because Revolut is getting a license on top of an already
| huge business.
|
| But again, all of what you said indicates that Revolut has
| fucked up. But it doesn't mean they are doing WireCard
| levels of fraud, or any fraud at all.
| bboygravity wrote:
| In this era of bank-runs, 2008 having been can-kicked, a
| massive regulatory crisis in the US markets (short hedge
| funds succesfully trying to cellar box banks and other
| stocks deliberately by shorting with counterfeit stock),
| the US about to enter hyper-inflation this decade,
| derrivatives crash incoming, FTX corruption, etc.
|
| I'm NOT going to give Revolut the benefit of the doubt I
| don't think :p
| kman82 wrote:
| Oh boy
| krona wrote:
| The Revolut UK banking chief executive also just quit 'for
| unrelated reasons' after texting a death threat to a customer:
| https://www.telegraph.co.uk/business/2023/05/13/revolut-exec...
| Mistletoe wrote:
| > He has taken up a new executive role at telecoms business
| Lycamobile.
|
| Unbelievable. It's impossible for people in this caste to fail.
| silisili wrote:
| This is so hilariously bizarre. Why does a customer have a bank
| executive's personal number? Why was the account frozen? Who
| did the exec think he was texting? And who was he going to be
| waiting for armed?
|
| I feel invested at this point, like I've watched a movie that
| just cut off in the middle...
| heavenlyblue wrote:
| Why did the executive have customer's phone number?
| silisili wrote:
| The article seemed to imply the customer had been texting
| complaints directly to the executive, not that the
| executive just cold texted a customer a weird threat.
| teddyh wrote:
| https://archive.is/QI8b0
| sampa wrote:
| rate hike will wipe out many companies
|
| it will blow up like this in very different places, wiping those
| who lived by the grace of free money
| cm2187 wrote:
| For all its sins, I don't think that's the case of Revolut.
| wslh wrote:
| That is pretty bad, it sounds like a criminal investigation
| should start immediately.
| exizt88 wrote:
| There's nothing in the article that indicates that regulators
| are considering a criminal investigation.
| petesergeant wrote:
| For what crime?
| ceejayoz wrote:
| Isn't figuring that out the point of investigating?
| bhouston wrote:
| I am not sure you can start a crime investigation until
| there is an accusation of a crime. A failing audit isn't
| enough.
|
| Financial oversight groups should start an investigation
| but it probably shouldn't be called criminal at this point.
| Just an oversight issue where they demand more info.
| ceejayoz wrote:
| You can absolutely start a criminal investigation without
| accusing someone of a crime.
| bhouston wrote:
| Failing an audit doesn't mean there is crime.
|
| But it is like a smoke alarm going off. It doesn't mean there
| is a fire but there could be.
|
| This company is so big that it should have a mature
| infrastructure for this type of thing. It is quite strange
| and thus suspicious that it is running its business is a
| haphazard way that it can not be effectively audited.
| amne wrote:
| What does it mean to be "effectively audited"? Is my
| spreadsheet missing a pivot table?
|
| Let's just remember that most bureaucracy exists so that
| only those who persevere can make it to the other side. And
| even then if you bother the wrong people there's more
| bureaucracy to harass you with.
| wslh wrote:
| Not clearly explaining the financials to an auditor by a
| big amount is an alarm and the CFO should clearly state why
| this is happening.
| balderdash wrote:
| Typically it's against the law to file/maintain false
| business records, and to the extent that they raised money
| based on inflated financials that would typically be some
| sort of fraud
| sschueller wrote:
| From what I have read in the last years of how the CEO and the
| company in general operate I would not be surprised if there will
| be a criminal investigation. This isn't the first time Revolut
| has had issues.
|
| [1] https://en.wikipedia.org/wiki/Revolut#Controversies
| pavlov wrote:
| So did "fintech" just mean "shitty bank" all along, same way that
| crypto was just shitty penny stocks.
| riffraff wrote:
| Revolut has had a fee questionable moments already, this does
| not seem to have been the case for other European fintech
| operations (wise, klarna, n26 etc).
|
| So yeah, I think a lot of fintech is not particularly good, but
| I don't think we can generalize to the level of the crypto
| boom.
| bboygravity wrote:
| You might want to try the search term "N26 locking customer
| accounts for no reason with no recourse".
| Moldoteck wrote:
| Before revolut our bank apps were pure garbage, so they
| improved them for compensation and I give revolut credit for
| this
| joering2 wrote:
| Punchline: "IT systems weren't designed in such a way that would
| allow for IT or business process controls to be effectively
| tested throughout the year."
| [deleted]
| rchaud wrote:
| Pssh, these are precisely the kind of burdensome regulations
| that are leading fast moving, thing-breaking companies like
| Revolut to leapfrog traditional finance /s
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