Kenyan court freezes Flutterwave, several Nigerians’ accounts over alleged money laundering
- A Kenyan court has decided to freeze the account of Nigeria’s flying fintech company Flutterwave
- This is part of an ongoing money laundering case involving Nigerian nationals and Kenya politician
- Flutterwave is seen as the cream of Nigeria’s fintech company after hitting a $3 billion valuation
A Kenyan High Court seized Sh7 billion ($59 million), or N24.50 billion, from 56 accounts linked to fintechs, including Nigeria’s Flutterwave, on the grounds that they were used as conduits for money laundering while offering merchant services.
This was revealed in an evening story by Kenya’s The Star on Wednesday, July 6, 2022.
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 are among the impacted fintechs.
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According to the article, the currencies blocked in accounts are US dollars, British pounds sterling, Euros, and Kenya shillings.
TechCabal reports that in the court filings, Flutterwave was formed on February 23, 2017, with directors named Olugbenga Agboola, David Mouko (Kenyan), and Flutterwave Inc, and it has 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank, and 6 with Ecobank.
According to Kenya’s Asset Recovery Agency (ARA), the company’s account received billions of shillings, which were then put in several bank accounts in an attempt to obscure the origin, source, or movement of the funds.
The report said:
“Investigations revealed that the bank account operations had unusual actions in which payments were received from specified foreign companies, raising suspicion.” The monies were subsequently moved to associated accounts rather than being paid to merchants.”
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Details about the ongoing investigation
According to Isaac Nakitare, an investigator with the agency, they received orders to search and check the accounts on April 4 of this year.
Nakitare claims that when he received the orders, Flutterwave’s accounts at Guaranty Trust bank had a balance of Sh5.3 billion, Equity bank had a balance of Sh1.4 billion, and Ecobank had a balance of millions.
Nairametrics reports that the Kenyan agency claimed that Flutterwave was hiding the nature of its company by allegedly offering a payment service platform without the central bank of Kenya’s authorisation, as required by section 12 of the national payment system act.
He said that the accounts were exploited as conduits for money laundering under the pretence of offering merchant services.
“There was no indication of retail transactions by customers paying for products and services, if the Flutterwave was truly delivering merchant services.” “There is also no indication of settlements with the supposed merchants.”
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According to Kenya’s ARA, the Flutterwave equity USD Bank account was opened in November 2020, with funds primarily from Flutterwave Inc. However, between 2020 and 2022, the account received approximately Sh12 billion, with funds either transferred to Remix Ltd or invested in a fixed deposit account.
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Meanwhile, three young Nigerians recently won nearly half a million dollars from Chinese billionaire Jack Ma.
Legit.ng reported that the funds were given to startups across Africa that set out to solve major problems within their countries.
Among the 10 finalists listed, Nigeria’s Ikenna Nzewi came 2nd as Jack Ma foundation disclosed over 12,000 applications were submitted.