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A Kenyan court docket has frozen Ksh400.6 million ($3.3 million) in accounts belonging to Nigerian fee firm, Flutterwave, over allegations of cash laundering and card fraud. The court docket granted the Asset Restoration Company’s (ARA) utility on August 25 to stop Flutterwave from transferring or withdrawing the funds in three financial institution accounts, together with two in UBA and one in Entry Financial institution; and 19 Safaricom M-Pesa paybill numbers.
A recurring theme within the allegations laid in opposition to Flutterwave by the ARA is the corporate’s involvement in card fraud and cash laundering. In July, the ARA was granted a court docket order to freeze Sh6.2 billion ($59.2 million) scattered in 62 financial institution accounts belonging to Flutterwave and 7 different corporations, on comparable grounds.
Flutterwave, now Africa’s greatest unicorn and valued at $3 billion since its $250 million Sequence D funding spherical in February, was based in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Christopher. The corporate facilitates cross-border fee transactions of small to massive companies in Africa through one API. Flutterwave’s API is used throughout 34 African nations and processes 200 million transactions price greater than $16 billion.
On this newest case, the ARA filings revealed that in one in every of Flutterwave’s UBA financial institution accounts, debits amounting to Sh136 million included chargebacks, reversals and refunds which indicated that they had been getting used for card fraud. The company additionally mentioned the conversion of {dollars} into shillings in that account, in a transaction price Ksh231 million, pointed to “a scheme of layering and intermingling”.
The court docket froze funds price Ksh110 million and $556,622 (Ksh66.7 million) in UBA; Ksh29.1 million in Entry Financial institution; and Ksh68 million, Ksh112 million and Ksh14.5 million in Safaricom M-Pesa.
In July, the Central Financial institution of Kenya (CBK) announced that Flutterwave and one other fintech unicorn, Chipper Money, had been unlicensed to function within the nation as remittance operators and fee companies. Flutterwave, which started operations in Kenya in 2016, responded by saying it entered the Kenyan market by partnering with licensed banks and cellular community operators, and was awaiting the results of the licence utility it made in 2019. A number of days later, the CBK ordered industrial banks, microfinance banks, and mortgage finance corporations to right away finish their partnerships with Flutterwave and Chipper Money.
The Nairobi-based court docket will preside over this matter once more on November 2022.
In the identical month a Kenyan court docket froze monies belonging to Flutterwave, accounts holding Ksh45 million ($381,000) price of funds belonging to 2 Nigerian fintech corporations, Korapay and Kandon, had been frozen upon an utility by the ARA for allegedly siphoning Ksh6 billion ($51 million) into the nation. These corporations, the ARA alleged, are linked to Flutterwave and are allegedly concerned in a world ring of fraudsters who transfer illicit cash via Kenyan banks.
Flutterwave has had a torrid 12 months coping with controversies each different month. Alongside its latest run-ins with Kenyan authorities, its CEO, Gbenga Agboola was accused of fraud, impersonation, and insider buying and selling. A Medium post by a former worker Clara Wanjiku and an article by Remainder of World documented these accusations and raised questions in regards to the tradition, ethics, and management at Flutterwave
We reached out to Flutterwave for remark however hadn’t acquired a response on the time of publication.
