Flutterwave, the most valuable unicorn in Africa, is still being prosecuted in Kenya. As the case is before Kenya’s high court, approximately $3 million of its money that was taken in the second government seizure over allegations of money laundering and fraud remains frozen in two banks and 19 M-pesa paybill numbers.
After a Kenyan court frozen $52.5 million from Flutterwave and other businesses such as Elivalat Fintech, Boxtrip travel and tours, Bagtrip travels, Hupesi Solutions, Cruz Ride Auto Ltd, and Adguru, the $3 million in funds were seized in late August of the previous year.
The Assets Recovery Agency (ARA), a state agency charged with locating criminal proceeds, filed a lawsuit for each seizure.
After the ARA formally withdrew the case, the initial case was closed last week and $52.5 million was released. However, the second case, in which the respondents are Flutterwave, Adguru, and Hupesi solutions, continues. The next mention was scheduled for yesterday, March 23, by high court judge Esther Maina.
Flutterwave’s chances of obtaining a license to operate in Kenyanare being hampered by the court’s continued uncertainty, despite predictions from some parties that the case will not go to a full hearing.
Flutterwave stated, in response to inquiries from Alive Hint regarding its current suit, “… We have been cleared of any wrongdoing, so we are confident that the pending suit will proceed in the same manner as the previous one because it is simply open due to standard court procedures.
The financial technology company stated, “We’re happy to put this behind us and work to simplify payments for endless possibilities in one of Africa’s most dynamic markets.”
What has transpired thus far?
Flutterwave remains frozen, despite funds being released after the first case closes.
After the ARA formally withdrew a forfeiture application against Flutterwave and its co-accused on February 27, this year, the court released the funds and ended the first case.
Alive Hint is aware, however, that despite the Kenyan court’s release of the funds following the conclusion of the initial case, the fintech had not yet accessed the funds by Friday, although some parties to the case had already accessed their funds. The reason why the fintech was unable to access its funds was not immediately clear. Alive Hint was informed by Flutterwave that the company is “working through the process to have access to all funds.”
The application of 2,468 Nigerians to have a portion of the frozen funds separated in the event that the money was forfeited to the government was rejected by the Kenyan court earlier in February, prompting the release of the funds. The people looked to recuperate reserves they had ‘contributed’ and lost through a games wagering stage, which they guarantee was a misleading venture and exchanging plan that utilized Flutterwave to deal with its installments.
The ARA had filed to withdraw the forfeiture application in December of last year, nearly a month after it applied to have Boxtrip Travel and Tours and Bagtrip travels expunged from the proceedings. As a result, the court rejected the application on February 9.
The beginning
The ARA accused Flutterwave of fraud and money laundering in July of last year, which resulted in the freezing of millions of dollars in accounts associated with the fintech and its co-accused.
Under the guise of providing merchant services, the agency claimed that Flutterwave’s bank accounts were used as a conduit for money laundering and that the fintech had no evidence to support retail transactions from customers paying for goods and services. In addition, there was no evidence that the alleged merchants had settled. The agency has filed a court petition to have the money taken away from the government.
However, after a new government took office at the end of last year and dropped some high-profile cases, such as the one against the Flutterwave, a turnaround has been observed.
Flutterwave, which was established in 2016 by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO), and Adeleke Adekoya, provides a remittance service that enables users to send money to and from the continent as well as facilitates cross-border payments in Africa. Flutterwavestore service, a small business e-commerce platform similar to Shopify, is one of its other offerings.
The fintech, which raised $350 million last year at a valuation of $3 billion and became one of Africa’s most valuable startups, has been involved in a number of controversies over the past year, including allegations of harassment, misappropriation of funds, and mismanagement.
Added Flutterwave’s response to the update.