After a rough past few months, Flutterwave returns in the news for less than glowing reasons. Earlier this week, a court in Kenya froze Flutterwave bank accounts over allegations that they were used as conduits for money laundering while disguising as merchant services. The court reportedly seized 7 Billion Kenyan shillings ($59 million) from 56 bank accounts belonging to fintechs, some connected to Flutterwave.
With Flutterwave Payment Technology Limited at the centre, other parties alleged to have received monies from Flutterwave through their directors/CEOs were also mentioned – Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and a Simon Ngige.
According to a Kenyan publication, The Star, the order to freeze the accounts came after the Asset Recovery Agency (ARA) told the court that Flutterwave’s account received billions of shillings and the same was deposited in the above 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,” the agency adds. Isaac Nakitare, an investigator with the ARA alleges that “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 agency goes ahead to say that some of the accounts had been dormant until recently and monies were transferred to some in tranches to avoid reporting threshold. In another case, one of the account holders allegedly tried to move money out of his account just before the court order but was stopped.
In response to the allegations, Flutterwave said in a statement that “claims of financial improprieties involving the company in Kenya are entirely false, and we have the records to verify this.” The company also explains that in the process of making payments on behalf of merchants and corporate entities, it earns a transaction charge. Assuring that it is working to figure out the motive behind the publication and have the records straightened, the company continues to do business as usual in its other locations.
Meanwhile in Kenya, the accounts will remain closed for 90 days and the case will resume hearing in November.
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