Kenyan Court Freezes Flutterwave’s Accounts Amidst Allegations of Massive Money Laundering Scheme

Kenyan High Court has ordered the freezing of 45 bank accounts and 10 mobile money wallets belonging to Flutterwave Payments Technology, a prominent Nigerian-owned financial technology firm.

The court’s decision comes in response to numerous allegations of involvement in a massive money laundering scheme that has rocked the country’s financial landscape.

The freeze on Flutterwave’s accounts was prompted by a group of 2,468 Nigerian nationals who filed a lawsuit against the firm, claiming they were defrauded of a staggering $12.04 million (Sh1.6 billion).

High Court judge Alfred Mabeya issued the orders, naming six local lenders, including United Bank of Africa, Access Bank, Guaranty Trust Bank, Equity Bank, Ecobank, and Safaricom, as interested parties responsible for holding the company’s funds.

“The application is certified as urgent… The application will be served for directions on 21.6.2023. In the meantime, prayers 2-9 [seeking freezing of bank accounts, bank keys, and mobile money wallets] are granted for 14 days only,” Justice Mabeya declared.

Flutterwave, which operates as a subsidiary of US-based Flutterwave Inc., has enlisted the services of Mahmoud Gitau Jillo Advocates to represent their interests in the legal battle that lies ahead. While the exact amount of money stashed in the frozen accounts remains undisclosed in the court documents, the plaintiffs suspect that the sums involved may reach into the billions.

This latest development places significant pressure on Flutterwave, which has been striving to obtain a Central Bank of Kenya (CBK) license amidst mounting legal battles and regulatory challenges.

Adding to the company’s troubles, Hong Kong’s Lae Technologies has implicated Flutterwave, along with seven other firms, in an alleged breach of contract with RemX Ltd, a suspected associate of the payments firm.

Lae Technologies is now seeking a court order to freeze several bank accounts, anticipating the recovery of a considerable sum of at least $88 million (Sh12.2 billion) owed by RemX.

The Assets Recovery Agency (ARA) had previously obtained freezing orders against Flutterwave and eight other Nigerian companies in 2022, with the banks holding a total of Sh6.2 billion. At that time, ARA was conducting an investigation into alleged money laundering, suspecting the companies of facilitating the movement of illicit funds and engaging in credit card fraud. However, in a surprising turn of events in February 2023, the ARA withdrew its case against the companies, granting them access to the frozen billions.

Flutterwave Payments Technology, registered as a payment technology and infrastructure provider in California, has its main operations spread across ten African countries, including Kenya and Nigeria.

Business Registration Service records indicate that Flutterwave Payments Technology is owned by California-registered Flutterwave Inc (247,000 shares) and Olugbenga Agboola (3,000 shares), who serves as the CEO of Flutterwave Inc. Agboola co-founded the company in 2016 alongside Iyinoluwa Aboyeji and Adeleke Adekoya.