Flutterwave named in Kenya money laundering investigation

Flutterwave, Africa’s leading payment technology company, with operations across thirty-three countries on the continent, has been fingered in a money laundering investigation by the Kenya’s Assets Recovery Agency (ARA). According to the investigators, Flutterwave accounts had Sh5.17 billion in 29 accounts at GTB, Equity and Ecobank in Kenya shillings, US dollars, Euros and Sterling pounds. […]

Flutterwave, Africa’s leading payment technology company, with operations across thirty-three countries on the continent, has been fingered in a money laundering investigation by the Kenya’s Assets Recovery Agency (ARA).

According to the investigators, Flutterwave accounts had Sh5.17 billion in 29 accounts at GTB, Equity and Ecobank in Kenya shillings, US dollars, Euros and Sterling pounds.

Flutterwave says on its website that it provides payment technology for merchants, and processes payments on the Web, mobiles, ATMs and points of sale worldwide.

The High Court has also frozen Sh467.1 million belonging to Boxtrip Travels and Tours and Sh436 million in Bagtrip Travels Ltd accounts.

 The other accounts include Elivalat Fintech Ltd (Sh1.16 million), Hupesi Solutions (Sh1.6 million), Cruz Ride Auto Ltd (Sh2.4 million).

Ruling on the matter on Wednesday, Justice Esther Maina of the High Court had authorised ARA to hold the cash as investigations continue.

The market greeted the news with mixed reactions. While some analysts quoted ARA as saying in court filings that the funds are proceeds of money laundering, as their investigations could not trace the wire transfers to any payment for goods and/or services, some sources say Flutterwave is just caught in the web, as they note the government is seeking free funds to bridge its fiscal position, as inflation and macroeconomic uncertainties cast shadows on economic growth and ability of the government to generate sufficient revenues, as budgeted.

More so, sources who prefer to be anonymous noted that the government is trying to use ARA to score political points and mask allegations of corruption in the public service, especially ahead of the 09 August 2022 presidential elections. “An easy target is a non-indigenous fintech, which may not be completely free of allegations but perhaps not as guilty as ARA has been charged”, one of the sources told Daily Trust.

 

ARA, which was established under Section 53 of the Kenyan Proceeds of Crime and Anti-Money Laundering Act No.9 of 2009 as a body corporate with the mandate of combating money laundering, terrorist financing and proliferation financing through identification, tracing, freezing, seizure and confiscation of proceeds of crime, got the blessings of the Court on Wednesday, 06 July 2022 to freeze over than Ksh6.2 billion  (equivalent to $52.5milion) in a number of bank accounts belonging to the Nigerian-founded, Flutterwave.

But in a statement on Thursday, July 7, Flutterwave denied the money laundering claims by ARA, assuring its clientele that it would defend its innocence in court.

Flutterwave in the statement dismissed claims of financial improprieties involving the company in Kenya, adding that it has records to prove the legitimacy of its business.

“Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities. In the process, we earn our fees through a transaction charge, records of which are available and can be verified”.

“As a business, we hold corporate funds to support our operations and provide services to all our customers,” the statement read in part.

Flutterwave explained that it facilitates payments for the biggest organisations in the world and small-sized businesses and they process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.

Further, the Nigerian start-up added that they follow strict business laws and that the accusations are baseless since the firm is regularly audited.

“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 4 firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant,” Flutterwave stated.

“Flutterwave has a responsibility to ensure the integrity of the ecosystem and we pledge our commitment to continue to work with all stakeholders to uphold this. We are working to figure out the motive behind the publication and have the records straightened.”

The company’s funds located in a number of banks, which some sources noted include Guaranty Trust Bank (GTB), Equity, Ecobank, KCB and Co-operative Bank accounts were frozen after ARA applied to block the transfer or withdrawal, pending the filing of a petition to have the money forfeited to the government, in line with the provisions of the law.

“That the 1st respondent’s bank accounts received billions in a suspected scheme of money laundering and the same deposited in different bank accounts in an attempt to conceal or disguise the nature, source, location, disposition or movement of the said funds,” said ARA.

“The transactions were done using cards issued by the same bank, at the same point, on the same day, raising suspicion of card fraud.”