Money laundering trial begins in Nairobi as Kenya seizes $56.7 million from Flutterwave as corruption - flutterwave

Money laundering trial begins in Nairobi as Kenya seizes $56.7 million from Flutterwave as corruption

Kenyan government has blocked financial assets of Nigeria’s fintech company, Flutterwave, following the filing of criminal accusations against the pan-African payment solutions provider.

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.

According to The Star, Flutterwave looked to be the largest of the firms involved in the investigation, with its accounts frozen to the tune of $56.7 million (6.7 billion Kenyan shillings) by the country’s Asset Recovery Agency.

“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.

Authorities issued orders to confiscate Flutterwave’s accounts in April after launching investigations into the company some months earlier. According to The Star, a 90-day temporary seizure authorization has been issued, and the case will be heard on November 7.

The seizure order appears to be related to a report written by writer David Hundeyin and released in April 2022 that detailed numerous financial, criminal, and ethical transgressions against Flutterwave and its CEO Gbenga Agboola.

Mr. Agboola refuted the claims made by Mr. Hundeyin at Subtack, but he promised to improve the way he runs the company moving ahead.

According to the indictment published by The Star on Wednesday, Mr. Agboola carried out shady transactions totaling $101 million ($12 billion in Kenyan shillings) before authorities became aware of his antics.

The Kenyan daily further claimed that Mr. Agboola and his associates in Nairobi operated covertly to take advantage of the nation’s banking system, making roughly 185 online card purchases using the same identifying number.

Several other suspicious transactions were also flagged by anti-money laundering detectives, including another instance in which Mr Agboola allegedly connived with another Nigerian national to launder cash through the Kenyan banking system.

“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,” Kenyan prosecutors added.

GTBank and Ecobank, amongst other financial services in Kenya, were also said to have provided their platforms to Flutterwave.

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In a text message to Peoples Gazette, Mr Agboola suggested the charges were politically motivated.

“Why are Nigerian companies in Kenya being targeted by Kenya ARA?” Mr Agboola said. “This is happening near their election time.”

Additionally, he said that Flutterwave was not the first Nigerian company to be attacked in Kenya.

GTBank and Ecobank spokespeople did not immediately respond to calls for comment.

In recent years, Flutterwave has flourished as an example of an African success story that offers cutting-edge solutions to the continent’s undeveloped financial services industry.

Tiger Global and other major players in the international financial markets have contributed to the firm’s fundraising efforts. However, a number of allegations of fraud and unethical behavior have left the corporation facing its most trying year to date.

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