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.
This was disclosed in a report by Kenya’s The Star on Wednesday evening.
The affected fintechs are Flutterwave Payment Technology Limited, Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and one Simon Ngige.
The report revealed that the currencies frozen in accounts are in USD, British Pound Sterling, EURO and Kenya shillings.
The court documents revealed that Flutterwave was registered on February 23, 2017, with directors listed as Olugbenga Agboola, David Mouko (Kenyan) and Flutterwave Inc, and operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and 6 with Ecobank.
Court Freezes Accounts Belonging To Flutterwave And Others Over Alleged Money Laundering
Kenya’s Asset Recovery Agency (ARA) told the court that the company’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 the agency says they obtained orders on April 4 this year to search and inspect the accounts.
Nakitare says by the time he obtained the orders, the accounts at Guaranty Trust bank belonging to Flutterwave had a balance of Sh5.3 billion, Sh1.4 billion at Equity bank and other millions at Ecobank.
The agency further stated that Flutterwave was concealing the nature of its business by allegedly providing a payment service platform without authorization from the central bank of Kenya as required by section 12 of the national payment system act.
The accounts he said were used as conduits for money laundering in the guise of providing merchant services.
“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.
Kenya’s ARA added that the Flutterwave equity USD Bank account was opened in November 2020, with funds received were mainly from Flutterwave Inc, however, between 2020 and 2022, the account received approximately Sh12 billion and the funds were either transferred to Remix Ltd while the rest were invested in a fixed deposit account.