Nigerian Fintech, Flutterwave, others accounts frozen over alleged money laundering in Kenya

A Kenyan High Court on Wednesday ordered the accounts of Nigeria-founded Fintech, Flutterwave Payment Technology Limited, and seven other companies to be frozen, over alleged money laundering. 

The firms have been accused of being used as conduits for money laundering in the guise of providing merchant services. 

Among the companies caught in the probe, Flutterwave appeared the largest and it alone had its accounts frozen to the tune of $56.7 million (6.7 billion Kenyan shillings). The company operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank, and 6 with Ecobank, local media reported. 

“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,” Kenya’s Asset Recovery Agency is reported to have said.

The Agency further accused Flutterwave of concealing the nature of its business by allegedly providing a payment service platform without authorization from the Kenyan Central Bank, The Star in Nairobi reported. 

“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,” an investigator with Kenya's Agency, Isaac Nakitare is reported to have said in court filings. 

Flutterwave is touted as one of Africa’s largest payment platforms. The fintech became the fourth African startup to reach “unicorn” status after it announced it had reached a valuation of over $1bn after raising $170m in a Series C round in 2021. 

Coincidentally, the situation in Kenya seems to have happened three months after the company and its founder, Olugbenga Agboola were accused of alleged financial, criminal, and ethical breaches by former employee Clara Wanjiku Odero and in an investigative report by journalist David Hundeyin of the West Africa Weekly.   

The company has however reacted to the seizure order, saying, the “claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this.”

In a statement it said it would work to establish the motives behind the claims, “and have the records straightened.

Flutterwave has had its Kenyan bank account frozen for money laundering.https://t.co/E0FWbKteVR

— David Hundeyin (@DavidHundeyin) July 6, 2022