A Kenyan court has ordered banks in the country to freeze the accounts of a Nigerian fintech company, Flutterware.
The court order came after allegations against the company of financial fraud and money laundering activities were made against the company. The fintech giant has, however, denied all the allegations and would appeal the decision.
Allegations of financial fraud and money laundering against Flutterwave were brought before the court by the Kenyan Assets Recovery Agency (ARA). The agency pleaded with the court to grant it an order to freeze all bank accounts associated with the company.
Upon approval from the court, a total of 6.2bn shillings ($52.5m; £43.9m) deposited in 62 bank accounts belonging to Flutterwave and six other firms were frozen.
In a report brought before the court, the Kenyan Assets Recovery Agency said that:
“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 settlements to merchants.
“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,” it said.
Isaac Nakitare, the lead investigator, who handled the case on behalf of the Asset Recovery Agency, further revealed that he was assigned to the case in April this year. He said at first contact. He noticed that despite the huge funds in the company’s account, there was no evidence of the inflow.
Mr. Nakitare said that the company had Sh5.3 billion in its Guaranty Trust Bank account, Sh1.4 billion at Equity bank, and other millions at Ecobank.
He further added that the company allegedly provided a payment service to customers with authorization from the Central Bank of Kenya, as required by law.
In addition to this, the agency claimed that the company used the accounts to carry out money laundering services in the guise of providing merchant services.
You will recall that last year, the Nigerian fintech giant revealed that it was the fastest African-led company on the continent to have reached a billion-dollar valuation. However, the Kenyan authorities say that there is no supporting transaction evidence that traces customer transactions to the funds in Flutterwaves’s accounts.
In response to the allegations and frozen accounts, Flutterwave released a statement saying:
“Claims of financial improprieties involving the company in Kenya are entirely false and are being circulated as part of a disinformation campaign.
“Flutterwave has been a target of deliberate false media reports and misrepresentations.”
What are your thoughts?