Jack Ma-owned London fintech WorldFirst has shifted its Asia business away from UK oversight in a major restructuring, the firm’s accounts published today show.
WorldFirst Asia, a business unit which accounted for around two-thirds of the company’s revenues and 70% of its profits, has been transferred to an Asian subsidiary of billionaire Ma’s Ant Group. WorldFirst said it took the decision in January based on “the strategic alignment of the legal entities.”
In July, Ant Group was fined around £800 million by the Chinese financial regulator after it was accused of violating rules on corporate governance, financial consumer protection, payment and settlement business, as well as anti-money laundering obligations.
WorldFirst, which was acquired by Ant Group in 2019 in a deal thought to be worth more than $700 million (£550 million), last year began an internal overhaul dubbed the ‘Global Base Line’ project, in which a string of management, risk, and oversight functions at the firm were moved from the UK to China.
A number of senior UK leaders have since left the firm, including its CEO, finance director, managing director, head of risk, chief information security officer, and group general counsel and compliance officer. Staff at the fintech’s parent company, Ant Financial, have been among those brought in to replace them.
At meetings of the firm’s risk committee, WorldFirst founder Jonathan Quin is understood to have questioned the move of governance functions from the UK to China.
But Quin told the Standard: “As part of people reporting into someone else, I wanted to make sure they understood the importance of sanctions regimes and compliance and risk matters but it was in the course of my duties as a director to report that.”
He said of the exec departures: “Some people did not want to work for a bigger Chinese business. I don’t think that’s unusual in a post-takeover situation.”
The transfer of WorldFirst’s overseas operations away from the UK comes amid a period of heightened scrutiny over British fintech firms’ risk policies after increased rules around sanctioned individuals and entities.
Last month, London fintech Wise was accused of ‘inappropriate’ controls over sanctions rules by the Office of Financial Sanctions Implementation after it was found to have permitted a cash withdrawal from a company account owned or controlled by a person under the government’s Russia sanctions list.
WorldFirst’s accounts for 2022, prior to the WorldFirst Asia offload, show the fintech’s turnover near-doubled to £103.6 million, while pre-tax profits surged to £25 million, up from a £6.4 million loss in the prior year.
The firm’s ‘other income’, which includes forex gains, fees charged to Ant Group and ‘government research and development grants,’ grew around four-fold to £26.1 million.
“Our continued focus as an enabler of the global eCommerce market has meant that we have maintained and grown our customer and volume base in the year, positioning us strongly,” WorldFirst said.
WorldFirst collected £9.1 million from the transfer of the Asian unit, it said, which would result in an estimated £1 million profit for 2023.
