The Bank of London was handed a winding up order by UK tax authorities over unpaid bills just days after founder Anthony Watson stepped down as CEO.
Watson transitioned to a new role as founder and advisor last week, making way for the appointment of chief risk and compliance ofiicer Stephen Bell as CEO.
The winding up petition was lodged by Her Majesty's Revenue and Customs just two days after Watson stepped aside.
A winding-up petition is a formal legal process used by HMRC against companies that have failed to pay tax bills more than 21 days after a statutory demand and can result in their assets being forcibly sold.
The UK clearing bank insists that the failed payment was due to an 'administrative error' and that Watson's decision to step aside was unrelated.
After days of unsettling events and concerns over its governance structure, the clearing bank startup announced on Sunday that it had raised £42 million in fresh capital in a founding round led by Magrove Capital Partners. The Bank maintains that the funding, which was clinched in August, was unrelated to HMRC's winding up order and that the money owed to the tax authorities had been paid in full.
Mark Tluszcz, CEO, Mangrove Capital Partners, says: “The Bank of London’s ability to close an over-subscribed £42 million funding round speaks to the confidence investors have in its leadership and unique model."
The Bank of London operates on three fronts: taking on established banks in the market for clearing and settlement; delivering transactions banking services for the corporate market; and fielding a banking-as-a-service offfering for companies wanting to embed payments in into their products.
Since its public launch in 2021, the loss making bank has signed up 4500 businesses and amassed £500 million in client deposits.