A Kenyan High Court has frozen 56 bank accounts belonging to Flutterwave Payment Technology Limited and other businesses connected with Nigerian nationals over money laundering allegations, Business Daily Africa reports.
The court issued the freezing order following suspicion that the funds are proceeds of card fraud and money laundering.
Other companies affected, according to the report, are Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited, and one Simon Karanja Ngige.
The accounts involved are in dollars, pounds sterling, euros, and Kenyan shillings, with a total holding of Sh7 billion suspected to be proceeds of money laundering by foreign nationals.
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.
Flutterwave, according to the court documents, 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.
ARA said 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.
The agency reportedly said, “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.”
In an affidavit, an investigator with the agency, Isaac Nakitare, 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 account 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 Systems 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.
Reacting, Flutterwave, in a statement on Thursday, described the allegations as “entirely false”, adding that it has the necessary records to prove its innocence.
The statement reads, “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 organisations 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.
“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 four firms. We remain proactive in our engagements with regulatory bodies to remain 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.”
