A Kenyan agency charged with tracing and freezing proceeds of
crime said it recently obtained an order giving it the authority to
freeze bank accounts belonging to Nigerian fintech Flutterwave. The
agency alleges that Flutterwave is not providing merchant services as
per claims, but is instead involved in money laundering activities.
Deliberate Attempt to Obscure Movement of Funds
Kenya’s Asset Recovery Agency (ARA) recently received an order from
the High Court to freeze bank accounts holding nearly $60 million which
the agency believes to be laundered money, a report has said. Companies
whose accounts have been frozen include the Nigerian fintech unicorn
Flutterwave, which operated more than 50 bank accounts.
According to a report
by the Star, ARA alleged that the fintech giant has received billions
in shillings which were then distributed in various accounts as part of a
deliberate effort to obfuscate the 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,” ARA stated.
Additionally, the agency alleges that Flutterwave is violating
Kenya’s National Payment System laws, which forbid the provision of a
payment service platform without the Central Bank of Kenya’s
authorization. An ARA investigator, Isaac Nakitare, is reported to have
obtained an order to search and inspect Flutterwave’s bank accounts on
April 4.
No Evidence of Retail Transactions
After receiving the order, Nakitare reportedly found the fintech
giant’s account with Guaranty Trust Bank had close to $45 million (5.3
billion Kenyan shillings) while the company’s bank account with Equity
Bank had close to $12 million. According to the report, Flutterwave’s
account at Ecobank held millions in local currency at the time of the
inspection.
Besides Flutterwave, the companies whose accounts were frozen include
Elivalat Fintech Limited, Boxtrip Travel and Tours Limited, Bagtrip
Travel Limited, Adguru Technology Limited, Hupesi Solutions, and Cruz
Ride.
According to ARA, most of the money transfers were carried out in
tranches of one million shillings or below. This is usually done when
the instigators of the transfers are trying to avoid detection, the ARA
said.
The agency also insisted that, despite the claims that Flutterwave
was providing merchant services, it found “no evidence of retail
transactions from customers paying for goods and services.” It added
that no evidence of “settlements to the alleged merchants” was found.
