Flutterwave, the African fintech giant challenges in Kenya continues as the Assets Recovery Agency (ARA) attempted to withdraw its second case against the company.
According to reports by TechCrunch, the High Court of Kenya, the country’s third highest court, rejected the ARA’s request to drop the case.
“Last year, in August, the ARA froze $3 million from Flutterwave, Hupesi Solutions, and Adguru Technology Limited under suspicion of money laundering and fraud. This was followed by another freeze of $52.5 million belonging to Flutterwave and six other companies. The ARA had filed a lawsuit after each seizure, and the first case was officially withdrawn in March of the current year.”
However, High Court judge Nixon Sifuna denied the withdrawal of the second case, stating that the ARA, being a publicly funded organization, had failed to provide reasons for the withdrawal, including details about any negotiations or settlements.
The ARA had presented an affidavit by its investigator and a collection of documents, including bank statements, as evidence that the frozen funds in Flutterwave’s bank and mobile money accounts were linked to criminal activities and money laundering.
Judge Sifuna questioned why the agency claimed to have no evidence of the alleged crimes.
The judge emphasized that bodies responsible for combating corruption, economic crime, organized crime, and money laundering should not neglect their duty or become complicit in such vices.
He ruled that the proceedings would proceed upon receipt of an affidavit sworn by the agency’s Chief Executive Officer (CEO) or a high-ranking officer. He further emphasized that the agency must act in the public interest and ensure transparency in its decisions and actions.
The ruling is likely to further delay Flutterwave’s prospects of obtaining a license to operate in Kenya.
In response to the ruling, Flutterwave stated that they were aware of the court’s decision but couldn’t comment on the specifics of the case to avoid contempt of court.
“They affirmed that their operations always adhere to the law and that they are cooperating with authorities for a swift resolution,” TechCrunch reported.
The ARA alleged that Flutterwave’s bank accounts were used for money laundering disguised as merchant services, claiming that the company failed to provide evidence for retail transactions or settlements to the alleged merchants.
Flutterwave, founded in 2016 by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO) and Adeleke Adekoya, aims to facilitate cross-border payments in Africa.
The company has since expanded to offer remittance services, a Shopify-like e-commerce platform called Flutterwave Store and an education payments platform called Tuition.
Despite raising $350 million at a $3 billion valuation last year, Flutterwave has encountered various controversies, including harassment claims, funds misappropriation and mismanagement.