Kenya dropped charges of financial impropriety against Flutterwave Inc., about seven months after a court in the East African nation froze the bank accounts of one of Africa’s biggest startups. The withdrawal of the charges was noted in a Kenyan High Court document seen by Bloomberg and verified by Robert Gitau, a lawyer representing Flutterwave. Dropping the case will come as a boost to Flutterwave, a Lagos and San Francisco-based financial technology company, that plans to expand its services of facilitating cross-border transactions in multiple currencies for companies, including Alibaba’s Alipay, Uber Technologies Inc.. The court in July restricted access to its Kenyan bank accounts holding more than $40 million, amid suspicion of financial impropriety, allegations the firm denied. Alice Mate, director in charge of the Assets Recovery Agency which filed the case, didn’t immediately respond to a request for comment sent after official hours on Friday, while a representative of Flutterwave declined to comment when contacted.
The East African nation froze the bank accounts of the most valuable startup in Africa almost seven months ago following a court order as the fintech was accused of card fraud and money laundering by the country’s anti-corruption agency, allegations which Flutterwave denied.
Flutterwave’s troubles in Kenya
The travails of Flutterwave in Kenya started in the middle of 2022 when the Kenyan news publication platform, The Star Kenya, reported that the Asset Recovery Agency (ARA) told a Kenyan High court that the accounts for seven targeted companies were used as conduits for money laundering in the guise of providing merchant services. The High court in Kenya then proceeded to freeze 56 bank accounts holding a whopping Sh7 billion suspected to have been laundered by foreign nationals. The companies listed included Flutterwave payment technology limited and others.
Following the report that the company’s accounts had been frozen, the company responded. A statement claimed that the “financial improprieties involving the company in Kenya were entirely false, and had the records to verify this.” The Central Bank of Kenya (CBK) also sent out a circular to all financial institutions in partnership with Flutterwave to cease working with the fintech company. Governor of the CBK, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting that it is not licenced to operate in Kenya. Similarly, a Kenyan court froze monies belonging to Flutterwave in accounts holding Ksh45 million ($381,000) and accounts belonging to two Nigerian fintech companies, Korapay and Kandon.
These were frozen following an application by the ARA for allegedly siphoning Ksh6 billion ($51 million) into the country. These companies, the ARA alleged, were allegedly involved in an international ring of fraudsters who move illicit money through Kenyan banks. Kandon and Korapay denied the allegations, and the charges against both companies were also dropped late last year. A Kenyan High Court froze another Sh400.6 million ($3.3 million) in three separate bank accounts and some 19 Safaricom M-Pesa pay bill numbers belonging to Flutterwave following further allegations of card fraud and money laundering by the country’s anti-corruption agency.
