A Kenyan High Court in Kenya has frozen 56 bank accounts belonging to Flutterwave Payment Technology Limited and other businesses connected with Nigerian nationals over money laundering allegations.
This is according to a report by Business Daily Africa.
Nigerian FinTech giant, Flutterwave is in a fresh controversy as a High Court in Kenya has frozen all her accounts.
The court issued the freezing order following suspicion that the funds are proceeds of card fraud and money laundering.
Other companies affected, according to the report, are Boxtrip Travel And Tours Limited, Bagtrip Travel Limited. Others are Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and one Simon Karanja Ngige.
The accounts in question are in dollars, pound sterling, euros and Kenya shillings. Total of the money in those accounts amount to Sh7 billion (24.6 billion naira). The money is we suspect are proceeds of money laundering by foreign nationals.
Kenya Asset Recovery Agency (ARA) Claim the Accounts were Conduits for Money Laundering
The orders, to be effective for 90 days, were issued after the Asset Recovery Agency (ARA), told the court that the accounts of the targeted companies were used as conduits for money laundering under the cover of providing merchant services.
Flutterwave, according to the court documents carries registration date of February 23, 2017. It has Olugbenga Agboola and David Mouko (a Kenyan) as directors.
A report said the company had 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and six with Ecobank.
ARA said the company’s account received billions of shillings and deposited the same in different bank accounts in an attempt to conceal the nature, source or movement of the funds.
The agency reportedly said, “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.”
ARA had Orders to Search Flutterwave Accounts
In an affidavit, an investigator with the agency, Isaac Nakitare, said the team obtained orders on April 4 to search and inspect the company’s accounts to establish a money laundering case.
He disclosed that when he obtained the orders, the accounts at Guaranty Trust Bank belonging to Flutterwave had a balance of Sh5.3 billion (18.66 billion naira) while Sh1.4 billion (4.93 billion naira) was in another one held in Equity Bank.
The Agency argued that Flutterwave was concealing the nature of its business by providing a payment service platform without authorisation from the Central Bank of Kenya (CBK) as required by the payment system act.
“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,” the investigator noted.
Flutterwave Denies Any Wrongdoing
Reacting, Flutterwave, in a statement on Thursday, described the allegations as “entirely false”. The company inisists that it has the necessary records to prove its innocence.
The statement reads, “Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities.
“In the process, we earn our fees through a transaction charge, records of which are available and can be verified. As a business, we hold corporate funds to support our operations and provide services to all our customers.
“By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.
“We are a financial technology company that maintains the highest regulatory standards in our operations.
“Our Anti-money laundering (AML) practices and operations undergoes regular audit. And it is usually by one of the big 4 firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant.
“Flutterwave has a responsibility to ensure the integrity of the ecosystem. And as usual we pledge our commitment to continue to work with all stakeholders to uphold this.
“We are working to figure out the motive behind the publication and have the records straightened.”
Recall that Flutterwave was also recently the subject of a major scandal. The scandal alleged insider trading and sexual harassment among others. But Flutterwave still claim innocence in that too.
Flutterwave is a Nigerian/American FinTech giant. In fact it is one of the biggest Nigerian FinTechs with a valuation of over $3 billion.