Court freezes bank accounts over alleged money laundering
By Jeph Ajobaju, Chief Copy Editor
A total Sh7 billion ($59 million) in 56 bank accounts belonging to Flutterwave and other fintechs have been frozen by a court in Kenya which ruled the accounts were used as conduits for money laundering purporting to provide merchant services.
Kenya’s The Star listed fintechs and one individual involved as
- Flutterwave Payment Technology
- Boxtrip Travel and Tours
- Bagtrip Travel
- Elivalat Fintech
- Adguru Technology
- Hupesi Solutions
- Cruz Ride Auto
- Simon Ngige
The report said the currencies frozen in the accounts are in USD, British Pound Sterling, EURO, and Kenya shillings.
Court documents disclosed that Flutterwave based in Nigeria was registered on 23 February 2017, with Directors listed as Olugbenga Agboola, David Mouko (Kenyan) and Flutterwave Inc, and operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank, and six with Ecobank.
Kenya’s Asset Recovery Agency (ARA) told the court that the accounts of Flutterwave received billions of shillings and the same was deposited in different banks to conceal the nature, source or movement of the funds.
“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 said.
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Other discoveries by ARA
ARA investigator Isaac Nakitare disclosed that the agency obtained court orders on 4 April this year to search and inspect the accounts, according to court documents, per reporting by Nairametrics.
Nakitare said:
When the orders were obtained, the accounts of Flutterwave at Guaranty Trust Bank had a balance of Sh5.3 billion, the one at Equity Bank Sh1.4 billion, the one at Ecobank millions.
Flutterwave was concealing the nature of its business by allegedly providing a payment service platform without authorisation from the Central Bank of Kenya as required in Section 12 of the National Payment System Act.
The accounts were used as conduits for money laundering in the guise of providing merchant services.
“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 Flutterwave equity USD Bank account was opened in November 2020 with funds received mainly from Flutterwave Inc.
Between 2020 and 2022, the account received approximately Sh12 billion some of which was transferred to Remix Limited or invested in a fixed deposit account.
Investigation in Nigeria
Flutterwave is one of Nigeria’s biggest fintech unicorns and one of the most respected tech startups in Africa.
Earlier this year, independent investigative journalist David Hundeyin in a report titled, “Flutterwave: The African Unicorn Built On Quicksand”, alleged that
- Flutterwave engaged in “insider trading, fraud, and perjury” over a period of four years.
- Flutterwave co-founder Olugbenga Agboola engaged in impersonation, insider trading, and inappropriate behaviour in the workplace.
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