- The Kenyan government has withdrawn the financial impropriety charges against a Nigerian fintech startup, Flutterwave.
- The charges were dropped, according to a Kenyan High Court document obtained by Bloomberg and confirmed by Robert Gitau, a Flutterwave lawyer.
- It comes seven months after a Kenyan court froze Ksh400.6 million ($3.3 million) in Flutterwave’s accounts due to money laundering and card fraud allegations, which Flutterwave denied.
Kenyan anti-money laundering agency, Asset Recovery Agency (ARA), was granted a court order in July 2022, freezing Sh6.2 billion ($52.5 million) spread across 62 bank accounts belonging to Flutterwave and seven other companies.
Per the ARA filings, debits totalling Sh136 million ($1.13 million) in one of Flutterwave’s UBA bank accounts included chargebacks, reversals, and refunds, indicating that they were used for card fraud.
Moreover, on August 25, 2022, the court granted ARA’s request to prevent Flutterwave from transferring or withdrawing funds from three bank accounts — two in United Bank for Africa (UBA) and one in Access Bank — and 19 Safaricom M-Pesa paybill numbers.
The court froze funds in UBA totalling Ksh110 million ($916,284) and Ksh66.7 million ($556,622), Access Bank totalling Ksh29.1 million ($242,399), and Safaricom M-Pesa totalling Ksh68 million ($566,430), Ksh112 million (932,944), and Ksh14.5 million ($120,783).
The Governor of the Central Bank of Kenya, Patrick Njoroge, also accused Flutterwave of operating without a valid licence in the country.
However, the company said it applied for a licence to operate as a payment service provider in 2019, but the CBK hadn’t approved it.
Nonetheless, it is unclear whether Flutterwave will continue to operate in the country following the withdrawal of the case.
Recall that in July 2022, Korapay, a Nigerian fintech startup, and Kenya-based Kandon Technologies, a liquidity management provider, was accused of fraud and money laundering.
However, the ARA withdrew Korapay’s case against the company following an investigation by the Kenyan National Police.
Kandon Technologies, a Nigerian technology firm, was also cleared of money laundering and card fraud allegations levelled against it by the Kenyan anti-money laundering agency.