Pablo Escobar’s brother is suing Klarna in the US, with hopes to scuttle its expansion

Sifted reports that a company run by the brother of deceased Colombian drug lord Pablo Escobar is suing point-of-sale lender Klarna for millions. The lawsuit alleges that Klarna unfairly withheld €400,000 (around $473,000) for a thousand Escobar-branded phones sold to customers through the Klarna platform.

Why should we care?
Klarna is valued at $10.6B, and is Europe’s most valuable fintech. It is reportedly pursuing plans to go public in the U.S., and the lawsuit amounts to an unwelcome distraction. Klarna maintains that its decision to withhold funds was based on ethical reasons. In particular, Klarna suspected that Escobar-branded phones were not delivered to customers. A spokesperson for Escobar Inc. said he is confident of the firm’s prospects to win, but sources within Klarna haven’t expressed concern. It nonetheless opens up questions around how disputes between brands and point-of-sale lenders may affect the conduct of business for both entities. For its part, Klarna is working to get the case dismissed. The issue is “unofficially talked about as a bit of a joke within the company,” an unnamed Klarna source told Sifted.