Foremost African payment solutions firm, Flutterwave, is enmeshed in money laundering charges in Kenya which has seen its accounts with over $56.7 million frozen by the authorities.
The firm was accused of conducting suspicious transactions and failing to comply with financial regulations in Kenya, The Star in Nairobi reported, adding that Flutterwave was one of about seven firms ensnared in an indictment that came down on Wednesday.
Other companies affected are Boxtrip Travel And Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions and Cruz Ride Auto Limited.
Flutterwave appeared the largest and it alone had its accounts frozen to the tune of $56.7 million (6.7 billion Kenyan shillings) by the country’s Asset Recovery Agency, The Star said.
The orders, to be effective for 90 days, were issued after the Asset Recovery Agency (ARA) told the court that the accounts of the targeted companies were used as conduits for money laundering under the cover of providing merchant services.
According to the court documents, Flutterwave was registered on February 23, 2017, with Olugbenga Agboola and David Mouko (a Kenyan) as directors.
A report said the company had 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and six with Ecobank.
According to ARA, the company’s account received billions of shillings and deposited the same 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,” prosecutors alleged in filings.
In an affidavit, Isaac Nakitare, an investigator with the agency said the team obtained orders on April 4 to search and inspect the company’s accounts to establish a money laundering case.
He disclosed that when he obtained the orders, the accounts at Guaranty Trust Bank belonging to Flutterwave had a balance of Sh5.3 billion while Sh1.4 billion was in another one held in Equity Bank.
The Agency argued that Flutterwave was concealing the nature of its business by providing a payment service platform without authorisation from the Central Bank of Kenya (CBK) as required by the payment system act.
“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 investigator noted.
The Star reported that the company’s equity account number revealed that at some point in May 2021, it received 185 online card payments all sharing the same bank identification number and that the transactions were done using cards issued by the same bank at the same point on the same day raising suspicion of card fraud.
Between 2020 and 2022, it reported, the account received approximately Sh12 billion and the funds were either transferred to Remix Limited while the rest were invested in a fixed deposit account.
An investigative report had earlier detailed a sordid tale of the African fintech giant and its involvement in identity theft, and securities fraud. Insider trading, arbitrarily inflating and deflating of stock prices and sundry unethical practices.