The High Court, Kenya’s third-highest court, has rejected plans by Kenya’s Assets Recovery Agency (ARA) to drop its second case against the African fintech giant Flutterwave.
On suspicion of money laundering and fraud, the agency sequestered $3 million belonging to Flutterwave, Hupesi Solutions, and Adguru Technology Limited in August of last year. Two months prior, the ARA had frozen an additional $52.5 million belonging to Flutterwave and six other companies. After each seizure, the ARA filed a lawsuit, the first of which was formally withdrawn in March of this year.
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Requests to withdraw the second suit were denied by High Court judge Nixon Sifuna, who, in a ruling seen by TechCrunch, noted that the ARA, a publicly funded organization, had failed to provide reasons for the withdrawal, such as “negotiations or settlement, or the terms of such negotiations or settlement.”
Despite the agency’s investigator’s affidavit and a trove of documents, including bank statements, proving that the millions in the fintech’s bank and mobile money accounts were proceeds of crime and money laundering, the company was not charged. The judge questioned the agency’s claim that it no longer possessed any evidence of the alleged offense.
“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, denying the withdrawal and adding that the proceedings will be decided upon receipt of a sworn affidavit from the agency’s CEO or a high-ranking officer.
According to him, the agency’s decisions and actions must be “transparent and above reproach in the public eye,” and they must also be in the public’s best interest.
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The ruling will likely delay the company’s chances of obtaining a license to operate in Kenya. TechCrunch has requested a comment from Flutterwave.
In two instances, according to the agency, Flutterwave’s bank accounts were used to launder money under the pretense of merchant services. It stated that Flutterwave had neglected to provide evidence to validate customer retail transactions. It was also stated that there was no proof of payments to the alleged merchants.
Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO), and Adeleke Adekoya founded Flutterwave in 2016 to facilitate cross-border remittances in Africa. Since then, it has expanded to include a remittance service that enables users to transfer money to and from the continent, a Shopify-like e-commerce platform for small businesses called Flutterwave Store, and Tuition, a payments platform for education.
It raised $350 million at a valuation of $3 billion last year, making it one of Africa’s most valuable ventures. It has been involved in a number of controversies, including allegations of harassment, misappropriation of funds, and mismanagement.
