(Reuters) – Uruguayan fintech dLocal, the South American country’s first unicorn, saw its shares tumble on Friday, after Argentinian news outlet Infobae published a story saying the government was investigating possible fraud of at least 400 million of dollars.
Citing unnamed official sources, Infobae said the Argentine government was investigating the fintech for “inappropriate maneuvers” and overseas transfers that allegedly constitute fraud, with most of its revenue coming from services sold to subsidiaries of the same company.
“The company operates as a simple instrument to take advantage of the exchange rate differential and to take dollars abroad with operations that are not reflected in the accounts,” Infobae said citing the sources.
Infobae said Argentine customs agency sources said they were considering reporting dLocal to the U.S. Securities and Exchange Commission (SEC).
dLocal issued a statement denying the article, saying it had been the victim of “misleading allegations” and would continue to process payments as normal in Argentina.
dLocal and the Argentine government did not immediately respond to Reuters’ request for comment.
Sergio Fogel, the company’s founder, however, told local Uruguayan newspaper El Observador that the firm’s lawyers were unaware of such a case: “We checked with the lawyers and there is nothing in official records”.
Shares of the fintech fell 17% in afternoon trading after losing more than 34% earlier in the day. Its stock was already battered by allegations of fraud by short seller Muddy Waters last November, and well below its value a year ago.
(Reporting by Sarah Morland and Carolina Pulice; Editing by Isabel Woodford)