A Kenyan High Court has seized Sh7 Billion ($59 million), from 56 accounts belonging to fintechs including Nigeria’s Flutterwave, stating they were used as conduits for money laundering in the guise of providing merchant services.
According to a newspaper report by Kenya Star, other affected companies include Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, and Cruz Ride Auto Limited.
Flutterwaves’s 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank, and six with Ecobank were all frozen.
According to the report, Flutterwave’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,” It said.
Isaac Nakitare, an investigator with Kenya’s Asset Recovery Agency (ARA) says they obtained orders on April 4 this year to search and inspect the accounts.
“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,” he said.
In a statement on Monday, the Nigerian fintech company denied claims that it was involved in the $59 million money-laundering scheme in Kenya stating that the company was a target of false media reports and misrepresentations.
The statement read in part, “Claims of financial improprieties involving the company in Kenya are entirely false and are being circulated as part of a disinformation campaign. Flutterwave has been a target of deliberate false media reports and misrepresentations.
“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.
“By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.”
The company also stated its role as a payments merchant in Kenya, noting that its anti-money laundering practices were always audited by a reputable anonymous company and that it complies with regulatory authorities.
“We are a financial technology company that maintains the highest regulatory standards in our operations. Our Anti-money laundering 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.
“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 statement concluded.
Joshua is a multidisciplinary creative and tech enthusiast who seeks to create meaningful experiences that make for a better and more equal world. He is a creative entrepreneur and human rights activist whose work navigates socio-cultural discourse and how it can be used as a vehicle for change.