July 07, (THEWILL) – For Flutterwave, one of Africa’s largest Tech Unicorns, the chickens may have finally come home to roost, as a Kenyan High Court has seized Sh7 billion, about $59 million, from 56 accounts belonging to it, and for using the firm as a conduit for money laundering in the guise of providing merchant services.
THEWILL had reported a few months ago, how Flutterwave valued at over $3 billion and run by Olugbenga Agboola, its CEO and co-founder, was accused of insider trading, fraud, impersonation, inappropriate behaviour in the workplace like bullying, intimidation and even going as far as sabotaging the work opportunities of one of his ex-staff.
This occurred over a four year period.
Other affected fintechs are Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and one Simon Ngige.
The report revealed that the currencies frozen in accounts are in USD, British Pound Sterling, EURO and Kenya shillings.
The court documents revealed that Flutterwave was registered on February 23, 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 6 with Ecobank.
Kenya’s Asset Recovery Agency (ARA) told the court that the company’s account received billions of shillings and the same was deposited in different bank accounts in an attempt 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.
Isaac Nakitare, an investigator with the agency, says they obtained orders on April 4, this year, to search and inspect the accounts.
Nakitare says by the time he obtained the orders, the accounts at Guaranty Trust bank belonging to Flutterwave had a balance of Sh5.3 billion, Sh1.4 billion at Equity bank and other millions at Ecobank.
The agency further stated that 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 by section 12 of the national payment system act.
The accounts he said were used as conduits for money laundering in the guise of providing merchant services.
Kenya’s ARA added that the Flutterwave equity USD Bank account was opened in November 2020, with funds received were mainly from Flutterwave Inc, however, between 2020 and 2022, the account received approximately Sh12 billion and the funds were either transferred to Remix Ltd, while the rest were invested in a fixed deposit account.
Meanwhile, Flutterwave has denied any wrongdoing.
“Claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this. We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering (AML) practices and operations are regularly audited by one of the Big four firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant”, it said.
Also, a few months ago, THEWILL had published reports of how the duo of Eghosasere Nehikhare, founder of Boltpay and CEO OF Multigate limited and Bukunmi Olufemi Demuren, founder and board chairman of Multigate Limited, of allegedly having a history of using tax havens to avoid taxes and also using their firms as conduits for money laundering activities. Both were at the centre of investigations by the Assets Recovery Agency, Kenya and Interpol for a string of suspicious transfers of $221 million (N128 billion) from Nigeria in local currency, which is worth Kenya Sh25 billion.