Lawsuit against her JP Morgan Harris Karonis testified, claiming that the American bank tried to reduce its valuation Viva Walletaccording to the FT.
Mr Karonis, who is the founder and co-owner of Viva Wallet, has launched legal proceedings against JP Morgan as, he claims, the latter tried to block the development of his company, in which the US bank holds a large percentage of shares.
According to legal documents seen by the FT, Mr Karonis believes JP Morgan is putting obstacles in the way of its Viva Wallet entering the US and emerging European markets, according to legal documents seen by the Financial Times.
Karonis also accuses JPMorgan of obstructing Viva by allowing the bank’s own payments business to compete in some European markets.
Based on JPMorgan’s Viva investment agreement, the US bank can take full control of the fintech if Viva’s value is below €5 billion in June 2025. Note that the US bank owns a 48.5% stake at Viva.
JP Morgan’s ‘answer’
As the FT report states, JPMorgan has filed a counterclaim against Karonis and claims that the latter is attempting to “limit or circumvent its contractual and legal rights as an investor.” Both legal claims were filed in High Court of London on Wednesday.
Since its founding in 2000, Viva has been one of the largest fintechs in southern Europe, offering payment services in 24 countries. In 2020, it obtained a banking license after the acquisition of the Praxia company.
Open fronts
According to the FT, the legal dispute between JPMorgan and Haris Karonis is the latest open dispute the bank has with a founder of one of the businesses it has invested in.
Notably, JPMorgan invested €1bn in Viva in 2021 to secure a 48.5% stake as part of a much-publicised push into the European payments market.
What does the lawsuit say?
In the legal action filed in the Supreme Court, Karonis’ holding company, WRL, challenged the terms allowing JP Morgan to acquire Viva because it says it creates incentives for the bank to limit its growthto buy it back at a lower price next year.
JPMorgan executives believe Karonis refuses to accept that the valuations of fintech companies have fallen sharply over the past two years due to higher interest rates.
When JPMorgan agreed to invest in Viva, CEO Jamie Dimon – whose grandfather immigrated to the US from Greece – traveled to Athens to meet Karonis as well as Prime Minister Kyriakos Mitsotakis.
At the bank’s 2022 investor day, Dimon praised JPMorgan’s global head of payments Takis Georgakopoulos for reaching the Viva deal.
Since then, relations between JPMorgan and Karonis, who is still chief executive of Viva, have soured.
Late last year, two directors appointed by JPMorgan to Viva’s board resigned after disagreements over their independence, people briefed on the situation said.
The two sides have also disagreed over how Viva is valued. JPMorgan hires Houlihan Lokey, which recently gave the fintech a €1bn valuation. Viva’s valuer, EY, valued it at €3 billion.
JPMorgan and WRL have reached an impasse over how to value Viva and are asking the High Court to resolve the dispute.
“This lawsuit was filed after all other options had been exhausted,” JPMorgan said in a statement about its claim against WRL.
“Despite this controversy, we believe in Viva Wallet, its people, our strategic investment in the company and our wider business in Greece.”
Representatives for Karonis and WRL declined to comment.
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