Flutterwave, a Nigerian fintech company, is again, back in the mud for alleged money laundering as Kenyan court freezes it many bank accounts.
Recall that Flutterwave had been in the news for the wrong reasons after an independent investigative journalist, David Hundeyin, published a damning report accusing the Nigerian tech unicorn of “insider trading, fraud, and perjury” occurring over a 4 year period.
The report is titled, “Flutterwave: The African Unicorn Built On Quicksand.”
Meanwhile, the latest mud dance allegedly involving money laundering further calls for a real scrutiny as to the nature of the businesses Flutterwave claims to do.
A report by a Kenyan medium, The Star, revealed on Wednesday that Kenyan court freezes flutterwave accounts.
Flutterwave’s Accounts’ Freeze:
The Kenyan High Court froze about 56 bank accounts belonging to Flutterwave Payment Technology Limited and other Nigerian businesses over money laundering.
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Among the other businesses whose accounts the court equally froze are Boxtrip travel and tours limited, Bagtrip travel limited, Elivalat fintech limited, Adguru technology limited, Hupesi solutions, Cruz ride auto limited and one Simon Ngige.
According to the court, Flutterwave used the accounts as conduit to launder money in foreign currencies such as USD, British Pound Sterling, EURO and Kenya shillings.
Money deposited in the accounts are up to the tune of Sh7 Billion ($59 million).
Kenyan Asset Recovery Agency (ARA) who filed the case told the court that Flutterwave and the other companies used the accounts to launder money under the cover of providing merchant services.
It said the tech unicorn registered in the country on February 23, 2017, with Olugbenga Agboola and David Mouko (a Kenyan) as directors.
It said while the company opened 29 bank accounts with Guaranty Trust Bank, it has 17 with Equity Bank and six with Ecobank.
All the bank accounts engage in fraudulent transactions.
Why the court believes Flutterwave accounts engage in money laundering:
An investigator with ARA, Isaac Nakitare, said the agency secured a court order in April 4, 2022 to search and inspect the accounts.
He said the accounts received billions of shillings and the company deposited the funds in different bank accounts in an attempt to conceal the nature, source or movement of the funds.
According to him, the accounts at Guaranty Trust bank belonging to Flutterwave had a balance of Sh5.3 billion.
Further, he said the unicorn had Sh1.4 billion at Equity bank and other millions at Ecobank.
To further conceal the dealings, the company deposited some of the funds into fixed deposits while investing the rest.
“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,” ARA said.
Further suspicions:
According to the agency, Flutterwave claims to be providing merchant services to merchants.
However, it does not have the authorization of the Kenyan Central Bank to do so.
The Kenyan constitutional provision, in section 12 of the national payment system act defines the right.
Consequently, Kenyan court freezes flutterwave accounts for lacking the authorization to operate merchant services.
“If indeed the Flutterwave was providing merchant services, there was no evidence of retail transactions from customers paying for goods and services. Further, there is no evidence of settlements to the alleged merchants,” ARA said.
Also, the revelation revealed that Flutterwave’s Equity account, in May 2021, received 185 online card payments.
What makes the payments more suspicious was that all the payment cards shared the same bank identification number.
Also, the Cards came from one bank and were issued the same day by the bank.
ARA said Flutterwave opened its equity USD Bank account in November 2020.
As at the time the investigation started, the fintech’s accounts at Guaranty Trust Bank had a balance of Sh5.3 billion.
Its Equity Bank accounts had Sh1.4 billion.
Also, the affidavit by ARA indicted Boxtrip travels and tours limited.
It said the company had 3.9 million dollars (Sh460 million) in its Eco bank account.
The documents said Boxtrip travels and tours listed Enyioma Olufemi who is a Nigerian national, as its Director.
“It received the money from Flutterwave ltd in two days. That is 27 to 28 April this year.”
“No explanation nor supporting documents were provided to justify the transactions therefore reasonable grounds to believe that the accounts were used as conduits for money laundering,” said ARA.
Similarly, another company involved in the fraudulent dealings, Bagtrip travels, has Sh425 million shillings.
Its listed director is Taiwo Soyemi, a Nigerian National too.
Also the court equally froze the account of another company, Elivalat Fintech Limited, with Sh1.2 million.
Tiware Adrian Simon who is one of the directors at Elivalat ltd received the fund.
Joining him in receiving the fund was Muoko David who is also one of the directors of Flutterwave ltd.
Also, the court froze Sh100 million held in its Equity account by Aduru technology limited.
The company has Adaeze Okonkwo, and Caroline Muchina, wife to David Muoko who is a director of Flutterwave as directors.
For Hupesi solutions, the court preserved the Sh1.6 million held in its Equity account.
Festus Mutuku is the proprietor of the company.
Furthermore, the court revealed another Sh2.4 million held in the account of Crus ride, a motor vehicle dealer.
The company transferred all funds it received from Flutterwave to Simon Ngige.
“The account had been dormant and had not received any funds from September 2021 to May 2022. However, in June 2022, the account received 269,000 US dollars (31.7 million shillings),” said ARA.
It said Ngige received 452000 US dollars (Sh53.3 million) in his KCB account from Flutterwave.
Also, Ngige received some of the funds from Cavin solutions and Cruz ride auto.
Also, on 24 June, Ngige transferred 200,000 US dollars (SHS 23.6 million) to his KCB account.
While he was trying to transfer another Sh14 million left in his account, the court stopped him.
The court granted the order for the accounts to remain frozen for 90 days.
What you should know:
Last two months, a ponzi scheme, 86wb swindled funds from many Nigerians and vanished.
While the reverse betting platform promised huge daily returns to unsuspecting victims, it said it kept its funds with Flutterwave.
However, when it suddenly stopped operating, it released several statements on its platform, accusing Flutterwave of diverting its funds.
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