Flutterwave, a Nigerian fintech firm, is among several companies alleged to have been accused of money laundering in Kenya, resulting to the closure of a total of 56 bank accounts.
The Star, a Kenyan-based newspaper reported that a Kenyan high court froze the 56 accounts holding about Sh7 billion suspected to have been laundered by foreign nationals.
The order, according to the report, was issued after the country’s Asset Recovery Agency (ARA) told the court that the accounts for seven targeted companies were used as conduits for money laundering in the guise of providing merchant services.
The accounts that have been frozen are in USD, British Pound Sterling, EURO and Kenya shillings.
The companies listed 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.
According to the court documents, Flutterwave was registered on February 23, 2017, with its Directors listed as Olugbenga Agboola, David Mouko (Kenyan) and Flutterwave Inc.
The company operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and 6 with Ecobank.
The Agency says 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,” the agency said.
In an affidavit, Isaac Nakitare, an investigator with the agency said the Agency obtained orders on April 4 this year to search and inspect the accounts.
Nakitare disclosed that 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. Some of the funds he said were transferred into fixed deposit accounts.
The agency, according to the report, further established 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.
The company’s Equity account number revealed that at some point in May 2021, it received 185 online card payments all sharing the same bank identification number.
The transactions were done using cards issued by the same bank at the same point on the same day raising suspicion of card fraud.
For instance, ARA says the Flutterwave equity USD Bank account was opened in November 2020. The funds received were mainly from Flutterwave Inc. 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.
Justice Maina further issued orders stopping Boxtrip travels and tours limited from transferring or withdrawing 3.9 million dollars (Sh460 million) held in its Eco bank account. The company was alleged to have received monies from Flutterwave within two days, April 27 and 28, 2022. The Director of Boxtrip travels and tours is listed as Enyioma Olufemi, a Nigerian national.
“No explanation nor supporting documents were provided to justify the transactions therefore reasonable grounds to believe that the accounts were used as conduits for money laundering,” said ARA.
The other companies and individual were also recipients of suspicious transfers from Flutterwave Limited, necessitating the freezing of their accounts.
The orders granted by the court will be in force for a period of 90 days.
The case will be mentioned on November 7, the report said.