Twelve months post-acquisition, JPMorgan Chase and Viva Wallet, a Greek fintech startup, are embroiled in a boardroom and strategic dispute. Initially purchasing a 49% stake for $800 million, JPMorgan aimed to bolster its small business payments reach across Europe. However, conflicts have arisen quickly, with two JPMorgan-nominated directors departing Viva’s board and the bank’s replacement suggestions ignored. Viva, retaining a 51% majority under CEO Haris Karonis, instead appointed its CFO and a former investor to the vacated positions, challenging the bank’s influence.
Amid these governance issues, JPMorgan has withheld action on Viva’s $100 million loan request. The strain extends beyond board composition to operational delays, with Viva attributing slowdowns to JPMorgan’s hesitancy. This fallout accompanies broader questions about JPMorgan’s acquisition tactics, especially following problematic investments like the fraudulent college loan firm, Frank. Despite this, the bank asserts its commitment to resolving the board representation per the shareholder agreement.
Viva’s trajectory is not without prior controversy, particularly evident in CEO Karonis’s clashes with past shareholders like DECA Investments. Allegations of unethical conduct and reputational risks have marred relationships, culminating in JPMorgan’s acquisition of DECA’s stake. Meanwhile, internal conflicts at Viva surface regarding compliance and operational ethics, particularly in its dealings with high-risk clients like adult entertainment producers. Despite these controversies, Viva maintains its commitment to regulatory compliance, as no significant penalties have been levied against it to date.
