A Kenyan agency charged with tracing and freezing proceeds of crime said it recently obtained an order giving it the authority to freeze bank accounts belonging to Nigerian fintech Flutterwave. The agency alleges that Flutterwave is not providing merchant services as per claims, but is instead involved in money laundering activities.
Deliberate Attempt to Obscure Movement of Funds
Kenya’s Asset Recovery Agency (ARA) recently received an order from the High Court to freeze bank accounts holding nearly $60 million which the agency believes to be laundered money, a report has said. Companies whose accounts have been frozen include the Nigerian fintech unicorn Flutterwave, which operated more than 50 bank accounts.
According to a report by the Star, ARA alleged that the fintech giant has received billions in shillings which were then distributed in various accounts as part of a deliberate effort to obfuscate the 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,” the ARA stated.
Additionally, the agency alleges that Flutterwave is violating Kenya’s National Payment System laws, which forbid the provision of a payment service platform without the Central Bank of Kenya’s authorization. An ARA investigator, Isaac Nakitare, is reported to have obtained an order to search and inspect Flutterwave’s bank accounts on April 4.
No Evidence of Retail Transactions
After receiving the order, Nakitare reportedly found the fintech giant’s account with Guaranty Trust Bank had close to $45 million (5.3 billion Kenyan shillings) while the company’s bank account with Equity Bank had close to $12 million. According to the report, Flutterwave’s account at Ecobank held millions in local currency at the time of the inspection.
Besides Flutterwave, the companies whose accounts were frozen include Elivalat Fintech Limited, Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Adguru Technology Limited, Hupesi Solutions, and Cruz Ride.
According to the ARA, most of the money transfers were carried out in tranches of one million shillings or below. This is usually done when the instigators of the transfers are trying to avoid detection, the ARA said.
The agency also insisted that, despite the claims that Flutterwave was providing merchant services, it found “no evidence of retail transactions from customers paying for goods and services.” It added that no evidence of “settlements to the alleged merchants” was found.
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