The news:
- On Wednesday, August 14, 2024, a federal High Court sitting in Abuja reportedly denied a motion by the Inspector General of Police (IGP) seeking to order about 12 banks and financial institutions to reverse billions of naira allegedly withdrawn from a Flutterwave account at Wema Bank fraudulently.
- The alleged withdrawals were made due to a system glitch on October 12 and 13, 2023, allowing several PoS device merchants to abuse their access by performing illegal transfers on its platform.
- At the time, the Nigerian-based fintech startup claimed that no customer funds were lost, assuring the public it was working closely with relevant authorities to resolve the issue.
Marked FHC/ABJ/CS/1015/24 and dated July 17, 2024, the motion ex parte — a motion made without the other party's presence — filed by the IGP’s legal team, argued that approximately 244 suspects (defendants) breached Flutterwave’s account and criminally moved billions of naira to numerous bank accounts belonging to faceless individuals.
Counsel to the IGP, Victor Okoye, urged the presiding judge, Justice Peter Lifu, to grant his motion ex parte and order the reversal of funds to Flutterwave.
The judge, however, declined to grant the one-sided motion as it was unjustified, noting that the court must also hear the banks in question in line with the constitutional provisions of a fair hearing.
“Should I order them [the banks] to reverse the funds without hearing their side of the story, based on your one-sided account?” the judge questioned.
Furthermore, he pointed out that nothing would be left of the case if he were to grant the motion, as the applicant failed to file a motion on notice alongside the ex parte motion as required by the court’s rules.
Justice Lifu described the ex parte motion as a clear breach of Section 36 of the 1999 constitution, which guarantees the right to a fair hearing.
When Okoye argued that the defendants were not traceable, the judge countered that the banks involved should have been served with the legal processes, giving them a fair chance to respond since they are the entities ultimately responsible for reversing the funds.
Recall that earlier in 2024, Techpoint Africa reported that Flutterwave allegedly lost ₦11 billion to a security breach. The fintech, however, assured that no customer funds or data were compromised in the process.
A motion to freeze accounts in 27 Nigerian banks and financial institutions, including Access Bank, Kuda, Zenith Bank, and OPay, was filed with suit no. MISC/MC4/181/23 and later granted on February 27, 2023. In February 2024, a court in Lagos ordered the 27 banks to unfreeze accounts.
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