The financial assets of Pan-African payment solutions firm Flutterwave have been frozen by Kenyan authorities after the latter filed an indictment against it. The company was charged with carrying out suspicious activities and breaching Kenyan financial laws. According to Nairobi-based news sources, Flutterwave was the largest of the seven companies included in the indictment on Wednesday with its frozen accounts to the tune of $56.7 million (6.7 billion Kenyan shillings) by the country’s Asset Recovery Agency.
Prosecutors said that investigations revealed unusual and suspicious activity in the bank account operations from specific foreign entities . The funds from these foreign entities would be transferred to related accounts as opposed to settlement to merchants.
Authorities issued warrants to confiscate Flutterwave’s accounts in April after launching investigations into the company some months earlier. According to The Star, a 90-day provisional seizure authorization has been issued, and the case will be heard on November 7.
These allegations coincide with a report by a Nigerian journalist David Hundeyin who exposed allegations of un-ethical, criminal and financial offenses by Flutterwave and its CEO Olugbenga Agboola. In that report which was published in April this year, Agboola is alleged to have created a phantom ‘co-founder’ identity to give himself more shares in the company’s early days. He was reported to have offered some of his employees shares in the company upon employment which he would later on (upon the employees’ exit) indirectly buy through an investment vehicle he controlled at extremely undervalued prices set by himself. Secondly, it was alleged that he did not disclose to Access Bank, his then employer, that he was simultaneously working for them and Flutterwave for about two years whereby he took unfair advantage of his position and assets at the bank in a series of dubious transactions which amounted to illegal insider trading.
Despite denying the accusations made by Mr. Hundeyin, Mr. Agboola promised to modify the way the company is managed moving forward.
However, according to the indictment issued yesterday, Mr. Agboola carried out questionable transactions totaling $101 million ($12 billion in Kenyan shillings) before authorities became aware of his activities.
The Kenyan Daily also reported that Mr. Agboola and his associates in Nairobi operated covertly to take advantage of the nation’s banking system, making roughly 185 online card payments using the same identifying number.
Several other suspicious transactions were also flagged by anti-money laundering detectives, including another instance in which Mr Agboola allegedly connived with another Nigerian national to launder cash through the Kenyan banking system.
“If indeed 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,” Kenyan prosecutors added.
Flutterwave has grown significantly as an African success story in offering cutting-edge solutions to the undeveloped financial services sector on the continent.
Tiger Global and other major players in the international financial markets have contributed to the firm’s funding efforts. However, a number of allegations of fraud and unethical behavior have left the corporation facing its most trying year to date.