Nigerian unicorn fintech Flutterwave has lately been in the news for both good and bad reasons, but the unflattering reasons seem to increase each passing day.
In Kenya, Flutterwave is among 56 companies whose bank accounts have been frozen by the High Court over allegations of money laundering. The accounts hold a total of Sh7 Billion ($59 million). The Asset Recovery Agency (ARA) obtained orders to freeze the accounts, saying it was investigating the movement of billions of shillings transacted through them.
Companies on this list include Flutterwave Payment Technology Limited, 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 Agency told the court that “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.”
Investigating officer Issac Nakitare told the court that the agency obtained orders to freeze the accounts on April 4 this year. The officer wrote in a sworn affidavit that by that date, Flutterwave had KSh5.3 billion held at Guaranty Trust Bank (GTB), Sh1.4 billion at Equity bank and other millions at Ecobank.
According to court documents, Flutterwave failed to reveal the nature of its business and disguised itself as payment service platform although it wasn’t authorized by the Central Bank of Kenya(CBK).
“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 investigating officer said.
The Nigerian startup is among the leading fintechs in Africa. The company was founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya and is headquartered in San Francisco, California. It has operations in Nigeria, Kenya, Ghana, and South Africa. TechCrunch reports that Fluttewave has accumulated over $400 million in funding as of February 2022.
In April this year, a former Flutterwave employee published damning claims against founder and CEO, Olugbenga “GB” Agboola, with allegations including fraud and bullying.
The ongoing court battle in the Kenyan High Court revealed that in May last year, the company received 185 payments via online card payments, all originating from the same bank identification number.
All the transactions were done using cards that the bank had issued on the same day and at the same point, further fueling suspicion of fraudulent dealing.
Other accounts frozen by the courts had Nigerian nationals as directors or co-directors.