Uruguayan fintech company dLocal processes data request from Argentine customs

By Lucinda Elliott and Valentine Hilaire

MONTEVIDEO (Reuters) – Uruguayan digital payments company dLocal has received a request for information from Argentine authorities and plans to respond by June 6, a co-founder said, after news of an alleged fraud investigation rocked its stock last week.

The tech “unicorn” took a hit on Friday after Argentine news portal Infobae reported that the government was investigating dLocal for “improper maneuvers” and transferring at least $400 million of money abroad that could constitute possible fraud.

In a statement on Friday, the company said the report was “factually inaccurate” and misleading.

In an interview in Montevideo, co-founder Sergio Fogel told Reuters that the company had responded to a request for information from Argentine customs authorities, adding that it was “strictly following the regulations.”

“So far we have only received one request for information, which we will of course answer promptly,” said Fogel. “We are confident that we will receive a clear invoice afterwards.”

Nasdaq-listed shares of dLocal – once a darling of investors and backed by major technology funds such as General Atlantic, Tiger Global and D1 – rose more than 8 percent on Tuesday after plunging more than 17 percent last week following the Infobae report.

US short-selling firm Muddy Waters also criticized dLocal in a report in November, pointing to “red flags” and accounting discrepancies in the company’s balance sheet, triggering a sell-off that pulled the US-listed fintech company’s share price down by more than 50 percent.

DLocal responded at the time that Muddy Waters' report contained “numerous inaccuracies, baseless allegations and speculation,” but conducted a special audit of its accounts.

DLocal, which operates in most Latin America and parts of Africa and Asia, reported a 35% year-on-year increase in net income in the first quarter. The company will hold 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)