Kenya’s Assets Recovery Agency (ARA) intentions of dropping its second action against African fintech company Flutterwave have been rejected by Kenya’s High Court, the country’s third highest court.
The agency had before now, frozen $3 million owned by Flutterwave, Hupesi Solutions, and Adguru Technology Limited in August of 2022 on grounds of money laundering and fraudulent activity.
Two months after the ARA froze another $52.5 million in Flutterwave and six other companies’ accounts, the funds were seized.
The ARA filed a lawsuit following each seizure, the first of which was officially dropped in March of this year.
The application to dismiss the second action was denied by High Court judge Nixon Sifuna, who highlighted in his judgment that the ARA, as a public-funded entity, was unable to provide grounds for the withdrawal, including “negotiations or settlement, or the terms of such negotiations or settlement.”
Regardless of the fact that the agency included an affidavit from its investigator and a plethora of documents, including bank statements, as proof indicating that the millions in the fintech’s bank and mobile money accounts were profits of crime and money laundering, the fintech was not charged.
The judge questioned the agency’s allegation that it no longer had any proof of the supposed crime.
“The bodies entrusted with the duty to fight corruption, economic crime, organized crime, and similar vices (including money laundering) should not abdicate their divine duty or become complicit in such vices,” said Judge Sifuna, refusing the withdrawal, he explained that the legal proceedings will be decided upon receipt of an affidavit sworn by the agency’s CEO or a high-ranking officer.
He stated that the agency’s decisions or activities must be “open and beyond reproach in the public eye,” and that its decisions or actions must “be open and beyond reproach in the public eye.”
The verdict is expected to further stall its chances of obtaining a license to operate in Kenya. According to the agency, Flutterwave’s bank accounts were utilized as conduits for money laundering under the pretext of merchant services in both incidents.
It claimed that Flutterwave had failed to produce proof to confirm client retail transactions. It went on to say that there was no proof of settlements with the purported merchants.
Flutterwave was established in 2016 to allow cross-border payments in Africa by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO), and Adeleke Adekoya.
It has subsequently expanded to include a remittance service that enables customers to send money to and from the continent — Flutterwave Store, a Shopify-like e-commerce platform for small enterprises — and Tuition, an education payments platform.
In 2022, it received $350 million at a $3 billion valuation, making it one of Africa’s most valuable firms. Nevertheless, it has had to cope with a number of scandals, including allegations of harassment, embezzlement of funds, and mismanagement.
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