Investors in N26 are working to remove the German digital bank’s founders as co-chief executives after regulator BaFin once again identified risk management failings at the fintech, according to the Financial Times.
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Backers are negotiating a deal that would see Valentin Stalf leave his role as co-CEO by September 1, with his fellow founder Max Tayenthal out by December 31, says the FT, citing sources.
N26’s supervisory board chair Marcus Mosen would step in as interim co-chief executive.
Investors have moved to oust the founders after a BaFin special audit found “weaknesses in the internal control systems, processes and overall organisation,” N26 stated in its annual report.
The watchdog has indicated that it will issue a formal warning to two members of N26’s management board and put in place a special monitor.
The latest regulatory scrape comes a year after BaFin finally lifted a cap imposed in 2021 on the number of new customers the lender was allowed to onboard.
That cap – along with a โฌ9.2 million fine – was handed down over lax money laundering controls. It was set at 50,000 new customers a month before being increased to 60,000 in 2023, severely limiting growth at Germany’s most valuable fintech.
According to the FT, the latest issues forced N26 to put a funding round launched earlier this year on hold. The company had planned to buy out investors from its 2021 round who had been guaranteed a 25% annualised rate of return from when they invested.
The deal to oust Stalf and Tayenthal would see them waive their special voting rights in exchange for the investors taking a haircut on their returns, says the FT.
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