Uruguayan fintech dLocal, the South American country’s first unicorn, saw its shares plummet on Friday, after Argentine news outlet Infobae published an article saying the government was investigating it for a possible fraud of at least $400 million.
Citing unnamed official sources, Infobae said the Argentina government was investigating the fintech for “improper manouevers” and transfers abroad that would constitute a fraud, with most of its income coming from services sold to subsidiaries of the same firm.
“The company operates as a mere instrument to take advantage of the exchange rate gap and to take dollars abroad with operations that are not reflected in the accounting,” Infobae cited the sources as saying.
Infobae said sources at Argentina’s customs agency said they were considering reporting dLocal to the U.S. Securities and Exchange Commission (SEC).
dLocal issued a statement denying the article, claiming it had been the victim of “misleading allegations” and that it would continue to process payments normally in Argentina.
dLocal and Argentina’s government did not immediately reply to Reuters’ request for comment.
Sergio Fogel, the company’s founder, however told local Uruguayan newspaper El Observador that the firm’s lawyers were not aware of such a case: “We checked with the lawyers and there is nothing in the official records.”
The fintech’s shares were down 17 per cent in afternoon trading after losing more than 34 per cent earlier in the day. Its stock was already battered by allegations of fraud from short-seller Muddy Waters last November, and far short of its value a year ago.