By A Kenyan High Court has frozen 56 bank accounts holding a whopping Sh7 billion ($59 million) belonging to Nigerian tech start-up, Flutterwave, and six other fintechs on grounds of money laundering.
According to reports, the accounts for seven targeted companies were used as conduits for money laundering in the guise of providing merchant services.
The affected companies include Flutterwave payment technology limited, Boxtrip travel and tours limited, Bagtrip travel limited, Elivalat fintech limited, Adguru technology limited, Hupesi solutions, Cruz ride auto limited and one Simon Ngige.
Kenyan news medium The Star reported that the frozen accounts are in USD, British Pound Sterling, EURO and Kenya shillings.
According to court documents, Flutterwave was registered on February 23, 2017, and listed its directors as Olugbenga Agboola, David Mouko (Kenyan) and Flutterwave Inc. The company also operated 29 bank accounts with Guaranty Trust Bank, 17 with Equity Bank and 6 with Ecobank.
Kenya’s Asset Recovery Agency (ARA) told the court that the company’s account received billions of shillings and the same was deposited in different bank accounts in an attempt to conceal the nature, source or 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,” it said.
In an affidavit, Isaac Nakitare, an investigator with the agency also revealed that they obtained orders on April 4 this year to search and inspect the accounts.
Nakitare said by the time he obtained the orders, the accounts at Guaranty Trust bank belonging to Flutterwave had a balance of Sh5.3 billion, Sh1.4 billion at Equity bank and other millions at Ecobank, adding that some of the funds were transferred into fixed deposit accounts.
The agency further stated that Flutterwave was concealing the nature of its business by allegedly providing a payment service platform without authorization from the central bank of Kenya as required by section 12 of the national payment system act.
The accounts, according to the investigator, were used as conduits for money laundering in the guise of providing merchant service.
ARA added that the Flutterwave equity USD Bank account was opened in November 2020, with funds received were mainly from Flutterwave Inc, however, between 2020 and 2022, the account received approximately Sh12 billion and the funds were either transferred to Remix Ltd while the rest were invested in a fixed deposit account.
“An analysis of the statements of accounts established that the accounts received suspicious deposits that indicate smurfing activities hoping to evade detection,” it said.
