Wowwo Q&A
This is a thread where you can ask your questions and write your Feedback about the Wowwo situation.
Dear Investors,
On December 17, 2021, we informed you that we made the decision to suspend loans originated by Wowwo from the Primary and Secondary Markets on Mintos until further notice.
The suspension is a cautionary measure to protect investor’s interests that is driven by macroeconomic changes which impact Turkish Lira exchange rate towards Euro. Given that Wowwo issues loans in Turkish Lira, but places them on Mintos in Euro, the company needs to pay the exchange rate difference from its own resources when forwarding borrower payments if Turkish Lira value drops.
As the Turkish Lira continued to depreciate rapidly, which could create a challenging environment for the company to meet its obligations towards investors on Mintos in a timely manner. We suspended Wowwo from the Primary and Secondary Markets.
Since then we shared also an update with you:
January 28, 2022
Dear Investors,
On Thursday, 27 January 2022, we had a meeting with Wowwo to further discuss possible solutions to the case of Wowwo's borrowers' repayments not being transferred to investors on Mintos. In the meantime, the funds due by Wowwo to Mintos and investors are moved to funds in recovery. The API communication system between Wowwo and Mintos was disconnected by the Turkish lending company due to currency risk that materialized for Wowwo as Lira continued to lose value against Euro.
In the most recent meeting, we exchanged information and proposals with the management of Wowwo, and we are planning to have a follow-up meeting next week when we will further discuss proposed options which will in the meantime be evaluated by both parties.
Mintos negotiations team is fully focused on coming to a resolution that will disrupt investors the least, as the case is currently classified “Stage 3”. You can find more about what this means in the article here:
https://www.mintos.com/blog/how-we-deal-with-loan-originator-issues-and-recovery-of-investor-funds/
As soon as we reach conclusions of value for investors and that can be publicly shared without disrupting our negotiation position, we won’t hesitate to update you immediately. In any case, we will share a more detailed follow-up after the upcoming meeting with Wowwo.
Please share your questions, thoughts and Feedback about Wowwo here.
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Hello Marek (Mintos),
Thanks you for the improve communication and better answer.
But something strange sound to me since the begining?
What is so much complicated that need panel of expert, and 5 years ?
I mean it's basically addition and substraction. I suppose mintos lend X and Wowwo give back Y.
What is much more complicated than taking a bank account and add Xs substract Ys and see who is the faulty guy ?
What sort of contract can be so much complicated that we need expert, and expert ?0 -
I have a feeling the answer to Cyril's question is also a simple one:
Wowwo doesn't want to repay the loan, or wants to play games to win time and use that time to make even more money on our money.
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However, I have the feeling that if even independent experts repeatedly come to conclusions that are not in Mintos' favor, then something is fundamentally wrong... and maybe someone must have made a very serious mistake at some point in the past.
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Of course, this all is speculation.
However, I assume Mintos has made contracts that are in accordance with Turkey's legislation.
I mean, it is ABC of international business that you check the legality of your business before you enter to any market so I doubt Mintos has made the mistake here...
More likely it is just that Wowwo wants a free loan and plays time here.
But of course, my view is as much speculation as other views.
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Well, if it really were as simple and obvious as basic ABCs and simple addition and subtraction, then independent experts certainly wouldn't repeatedly come to conclusions that are not in Mintos' favor.
That's why I doubt the situation is as simple and clear-cut as it is often made out to be.
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Of course, in court there are both parties that have different opinions.
They are arguing with each other. It would not be in court if both Wowwo and Mintos agreed on everything.
Can Mintos confirm that the contract between Wowwo and Mintos were in accordance with Turkish legislation?
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However, I'm not talking about Wowwo's subjective opinion. I'm referring to the assessments made by independent, objective experts. It's not a good sign when their assessments contradict Mintos' position. At the very least, it shows that the case is not as simple, straightforward, and obvious as it is often made out to be, especially when even independent experts disagree with Mintos on certain points and reach conclusions that are not in Mintos' favor.
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I hope Mintos clarifies us the following:
Is the contract between Wowwo and Mintos were in accordance with Turkish legislation?
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One thing is certain, the contract wasnt waterproof since there are so many expert opinions disagreeing on it.
Most likely what happened is this.
Wowwo borrowed a sum in lira. An amout of euro was converted at the day of transaction.Mintos expects full repayment + interest in euro
Wowwo expects full repayment + interest in lira.1 eur was about 10 lira at that time, today 1 eur is 55 lira.
So, should they pay back the sum, or pay back the value?
Also, to add context since it wasnt mentioned here before:
Argument B: Hardship and Cluasia Rebus Sic Stantibus (Article 138 of the Turkish Code of Obligations)
Other experts may side with Wowwo's defense using the Turkish legal doctrine of Hardship (Aşırı İfa Güçlüğü). Under Article 138, if an extraordinary and unpredictable situation occurs (like hyper-depreciation of the Lira) that fundamentally alters the balance of the contract against the debtor, a party can request the court or arbitrator to adapt the contract or revise the sum owed. Experts leaning this way would argue that forcing Wowwo to pay the full Euro amount is commercially impossible and destroys the economic reality of the original deal.I suppose this is what they are leaning on
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i fear that at the end of the day, if wowwo has no money, then there is no money to be returned. it has been so many years, i guess that even if they did have the money then - which i doubt, because of the devaluation of the turkish lire, then now they won't have the money.
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