By Lucinda Elliott and Valentine Hilaire
MONTEVIDEO (Reuters) – Uruguayan digital payment firm dLocal has received an information request from Argentine authorities and plans to respond by a June 6 deadline, a co-founder said, after news about an alleged fraud probe hit the stock last week.
The tech “unicorn” took a hit on Friday after Argentine news outlet Infobae reported that the government was investigating dLocal for “improper maneuvers” and fund transfers abroad of at least $400 million that would constitute possible fraud.
The company said in a statement on Friday the report was “factually inaccurate” and misleading.
In an interview in Montevideo, co-founder Sergio Fogel told Reuters the firm was complying with a request for information from Argentine customs authorities, noting that it “strictly follows regulations.”
“So far we have only received a request for information, which we will of course answer in time,” Fogel said. “We are confident that we will receive a clean bill after this.”
Nasdaq-listed shares in dLocal – once an investor darling and backed by major tech funds including General Atlantic, Tiger Global and D1 – rose over 8% on Tuesday, after plunging more than 17% last week following the Infobae report.
U.S. short-selling firm Muddy Waters also criticized dLocal in a report in November, citing “red flags” and accounting discrepancies in its balance sheet, triggering a sell-off that dragged the fintech’s U.S.-listed shares down over 50%.
DLocal responded at the time by saying Muddy Waters’ report contained “numerous inaccurate statements, groundless claims and speculation,” but conducted a special audit of its accounts.
DLocal, which operates across most of Latin America as well as parts of Africa and Asia, posted a 35% year-on-year jump in its first-quarter net profit. The firm is set to host an investor day in New York on June 8.
(Reporting by Lucinda Elliot; Additional reporting by Valentine Hilaire in Mexico City; Editing by Richard Chang)
