Flutterwave’s troubles in Kenya are yet to end as the second case continues

Africa’s Most Valuable Unicorn Flutterwave is still not off the hook in Kenya. About $3 million of his money, seized in the second government seizure on money laundering and fraud claims, remains frozen in two banks and 19 mobile money accounts (M-pesa paybill numbers) as the matter before the top court of Kenya lies.

The $3 million seizure came at the end of August last year, less than two months after a Kenyan court ordered $52.5 million from Flutterwave and other companies including Elivalat Fintech, Boxtrip Travel and Tours, Bagtrip Travels, Hupesi Solutions, Cruz Ride Auto Ltd and Adguru had frozen.

In each seizure, the country’s Asset Recovery Agency (ARA), a state agency tasked with tracing proceeds of crime, filed a lawsuit.

The original case closed last week and released $52.5 million after ARA officially withdrew the case. However, the second case where Flutterwave, Adguru and Hupesi solutions are the respondents continues. High Court Judge Esther Maina yesterday set the next mention for March 23.

While some parties predict the case is unlikely to go through to full hearing, Flutterwave remains unsettled by the courts, delaying its prospects of being licensed to operate in Kenya.

What has happened so far

Approved funds after fThe first case is closed but Flutterwave is still frozen

The court released funds belonging to Flutterwave and his co-defendants after ARA officially withdrew a forfeiture motion against them all on February 27 this year, ending the first case.

However, TechCrunch is privy to information that although the Kenyan court released the funds after the original case closed, the fintech had yet to access the funds as of Friday — however, some parties in the case had accessed their funds. It wasn’t immediately clear why the fintech couldn’t access its funds, and efforts to get a statement from Flutterwave on the matter were unsuccessful.

The release of the funds came after Kenya’s court earlier in February rejected a request from 2,468 Nigerians who wanted some of the frozen funds segregated in case the money was forfeited to the government. The individuals were attempting to recover funds they had “invested” and lost through a sports betting platform which they claim was a bogus investment and trading system that Flutterwave was using to process its payments.

The court denied the motion on Feb. 9, arguing that ARA filed a motion last December to withdraw the waiver, almost a month after it filed a motion to exempt Boxtrip Travel and Tours and Bagtrip Travels from the case.

The genesis

Flutterwave’s troubles in Kenya began in July last year when it was accused by ARA of fraud and money laundering, leading to the freezing of millions of dollars in accounts linked to the fintech and its co-defendants.

The agency said Flutterwave’s bank accounts were used as channels for money laundering under the guise of providing trading services and that the fintech had no evidence to confirm retail transactions from customers paying for goods and services. It added that there was no evidence of any comparisons to the alleged dealers. The agency has asked the court to withhold the money to the government.

However, a turnaround was seen after a new government took office late last year, dropping some high-profile cases, including that against the Flutterwave.

Founded in 2016 by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO) and Adeleke Adekoya, Flutterwave facilitates cross-border payments in Africa. Services also include the Flutterwavestore service, a Shopify-like e-commerce platform for small businesses.

The fintech, which raised $350 million last year at a $3 billion valuation, making it one of Africa’s most valuable startups, has faced a number of controversies over the past year, including allegations of harassment, misappropriation of funds and mismanagement.

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