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Kenya Drops Fraud Charge Case Against Nigerian Company, Flutterwave

The Kenyan government has withdrawn the financial impropriety case against Nigerian fintech company Flutterwave.


Flutterwave provides a payment infrastructure for global merchants and payment service providers across Africa.


The East African nation froze the bank accounts of the startup almost seven months ago following a court order as the fintech was accused of card fraud and money laundering by the country’s anti-corruption agency, but Flutterwave denied the allegations.


The withdrawal of the charges was noted in a Kenyan High Court document seen by Bloomberg and verified by Robert Gitau, a lawyer representing Flutterwave.


According to Technext, Flutterwave was last valued at more than $3 billion and had raised more than $450 Million in VC Funding. The withdrawal of the charges comes at a time the Nigerian prepares for an initial public offering on the Nasdaq stock exchange.


In 2022, a Kenyan news publication platform, The Star Kenya, reported the Asset Recovery Agency (ARA) told a Kenyan High Court that the accounts for seven targeted companies were used as conduits for money laundering in the guise of providing merchant services.


The court in Kenya proceeded to freeze 56 bank accounts holding a whopping Sh7 billion suspected to have been laundered by foreign nationals. The companies listed included Flutterwave payment technology limited and others.


Following the report that the company’s accounts had been frozen, the company in a statement said the “financial improprieties involving the company in Kenya were entirely false and had the records to verify this.”


The Central Bank of Kenya (CBK) also released a circular to all financial institutions in partnership with Flutterwave to cease working with the fintech company. CBK Governor, Patrick Njoroge, said during a Monetary Policy Committee (MPC) meeting that it is not licenced to operate in Kenya.


Similarly, a Kenyan court froze monies belonging to Flutterwave in accounts holding Ksh45 million ($381,000) and accounts belonging to two Nigerian fintech companies, Korapay and Kandon, Technext further noted in its report. The monies were frozen following an application by the ARA for allegedly siphoning Ksh6 billion ($51 million) into the country.


These companies, the ARA alleged, were allegedly involved in an international ring of fraudsters who move illicit money through Kenyan banks. Kandon and Korapay denied the allegations, and the charges against both companies were also dropped late last year.


A Kenyan High Court froze another Sh400.6 million ($3.3 million) in three separate bank accounts and some 19 Safaricom M-Pesa pay bill numbers belonging to Flutterwave following further allegations of card fraud and money laundering by the country’s anti-corruption agency.


With the development, Flutterwave joins other Nigerian fintechs to be cleared of financial impropriety in Kenya.


After issuing money laundering and card fraud accusations against payments solution company, Korapay in July 2022, the ARA withdrew its case against the company following an investigation by the Kenyan National Police.


Similarly, Nigerian tech company, Kandon Technologies, was also cleared of money laundering and card fraud allegations laid against it by the Kenyan anti-money laundering agency Asset Recovery Agency (ARA), according to documents seen by Technext.


Up to the time of writing this report, the reasons for dropping the charges have not been officially revealed.


According to the report, Flutterwave is yet to release an official reaction to the decision and Bloomberg’s attempt to reach Assets Recovery Agency which filed the case, for comment was futile. 

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