Africa’s foremost fintech, Flutterwave, is in another runny battle with the Kenya government.
Although the case is currently before Kenya’s high court, almost $3 million of the company’s money that was seized in the second government seizure due to allegations of money laundering and fraud is still frozen in two banks and 19 mobile money accounts (M-pesa paybill numbers).
Less than two months had passed since a Kenyan court had frozen $52.5 million belonging to Flutterwave and other companies like Elivalat Fintech, Boxtrip Travel and Tours, Bagtrip Travels, Hupesi Solutions, Cruz Ride Auto Ltd., and Adguru. This $3 million fund seizure occurred in late August of last year.
The nation’s Assets Recovery Agency, a state organization entrusted with tracking down the proceeds of crime, filed a lawsuit with each seizure.
The initial case was officially withdrawn by the ARA last week, and $52.5 million was released as a result.
Flutterwave, Adguru, and Hupesi solutions are the respondents in the second case, which is still ongoing. Judge Esther Maina of the high court yesterday scheduled for March 23.
Flutterwave’s chances of obtaining a license to operate in Kenya are being delayed by the courts’ continued ambiguity, despite certain parties’ predictions that the matter is unlikely to move to a full hearing.
As the ARA formally abandoned a forfeiture application against all of them on February 27 of this year, ending the initial case, the court freed the funds belonging to Flutterwave and its co-accused.
The money was released after a Kenyan court rejected a plea by 2,468 Nigerians to have a portion of the frozen assets divided in the event that the money was lost to the government earlier in February.
On February 9, the court dismissed the motion on the basis that the ARA had requested to withdraw the forfeiture application over a month earlier, in December of last year, when it had requested to have Boxtrip Travel and Tours and Bagtrip Travels removed from the proceedings.
Flutterwave’s problems in Kenya began in July of last year when it was charged by the ARA with fraud and money laundering. As a result, accounts belonging to the fintech and its co-accused were frozen, totaling millions of dollars.
The agency claimed that Flutterwave had no documentation to support retail transactions from customers paying for products and services and that the fintech’s bank accounts had been utilized as conduits for money laundering under the pretence of offering merchant services. It further stated that there was no proof of payments made to the claimed merchants.
The organization has requested that the money be forfeited to the government in a court suit.
But, since a new administration assumed power at the end of last year, some high-profile cases—including the one against the Flutterwave—have been dropped.
