A Kenyan High Court has frozen Sh7 Billion ($59 million), from 56 accounts belonging to fintechs including Nigeria’s Flutterwave, following allegations that they were being used for money laundering.
The affected fintechs include Flutterwave Payment Technology Limited, Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and one Simon Ngige
“Investigations established that the bank accounts operations had suspicious activities where funds could be received from specific foreign entities which raised suspicion. The funds were then transferred to related accounts as opposed to settlement to merchants,” it said.
Kenya’s Asset Recovery Agency (ARA) told the court that the company’s account received billions of shillings and the same was deposited in different bank accounts in an attempt to conceal the nature, source or movement of the funds.
According to Isaac Nakitare, an investigator with the agency says they obtained orders on April 4 this year to search and inspect the accounts. The Asset Recovery Agency obtained orders to freeze the accounts, saying it was investigating the movement of billions of shillings transacted through them.
The report revealed that the currencies frozen in accounts are in USD, British Pound Sterling, EURO and Kenya shillings.
Referring to court documents, Flutterwave was registered on February 23, 2017, with directors listed as Olugbenga Agboola, David Mouko (Kenyan) and Flutterwave Inc, and operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and 6 with Ecobank.
Nakitare says by the time he obtained the orders, the accounts at Guaranty Trust bank belonging to Flutterwave had a balance of Sh5.3 billion, Sh1.4 billion at Equity bank and other millions at Ecobank.
The agency further stated that Flutterwave was concealing the nature of its business by allegedly providing a payment service platform without authorization from the central bank of Kenya as required by section 12 of the national payment system act.
The accounts he said were used as conduits for money laundering in the guise of providing merchant services.
“If indeed the Flutterwave was providing merchant services, there was no evidence of retail transactions from customers paying for goods and services. Further, there is no evidence of settlements to the alleged merchants,” he said.
Kenya’s ARA added that the Flutterwave equity USD Bank account was opened in November 2020, with funds received were mainly from Flutterwave Inc, however, between 2020 and 2022, the account received approximately Sh12 billion and the funds were either transferred to Remix Ltd while the rest were invested in a fixed deposit account
Ealier this year, accusations were laid out by David Hundeyin, in an article titled, “Flutterwave: The African Unicorn Built On Quicksand”, he accused the organization of fraud, perjury, and insider trading shedding a dark cloud over one of the most respected tech startups in Africa.
In its last fundraising announcement in February, the company revealed that 900,000 businesses globally use Flutterwave to process payments, in 150 currencies, up from 290,000 businesses, as at March 2021. This threefold increase signals that the African payment giant had processed 140 million transactions worth more than $9 billion since its inception.
Launched in 2016 as a Nigerian and US-based payments company, with offices in Lagos and San Francisco, Flutterwave was co-founded by Agboola, Adekoya, and Aboyeji, who had earlier co-founded Andela and the company had grown to become a beacon of success in the African tech ecosystem.