Plans by the Kenya Asset Recovery Agency (ARA) to drop its second case against African fintech giant Flutterwave have been rejected by the country’s third highest court, the High Court.
In August last year, the agency froze $3 million belonging to Flutterwave, Hupesi Solutions, and Adguru Technology Limited on suspicion of money laundering and fraud. The seizure of funds occurred two months after ARA froze another $52.5 million belonging to Flutterwave and six other companies. The ARA filed suit after each seizure, the first of which was formally withdrawn in March of this year.
The request for withdrawal of the second lawsuit was denied by Superior Court Judge Nixon Sifuna who, in a ruling seen by TechCrunch, noted that the ARA, being a publicly funded body, had not provided reasons for the withdrawal, including “negotiations or settlements, or the terms of such negotiations or settlements.”
This was despite the fact that the agency included an affidavit from its investigator and a host of documents including bank statements as evidence that the millions in the fintech bank and mobile money accounts were the proceeds of crime and money laundering. The judge sought to know why the agency claimed to have no more evidence of the alleged crime.
“Bodies entrusted with the duty to combat corruption, economic crimes, organized crime and similar vices (including money laundering) must not abdicate their divine duty or become complicit in such vices,” Judge Sifuna said in declining the withdrawal, adding that the process will be determined upon receiving an affidavit from the agency’s director general or a high-ranking official.
He said the agency must be guided by the public interest, and that its decisions or actions must “be open and above reproach” in the public eye.
The ruling is intended to further delay its prospects of obtaining a license to operate in Kenya. TechCrunch has reached out to Flutterwave for comment.
In both cases, the agency said Flutterwave’s bank accounts were used as conduits for money laundering under the guise of commercial services. It said Flutterwave had not provided evidence to validate customer retail transactions. He added that no liquidations to the presumed merchants were verified.
Flutterwave was founded in 2016 by Iyinoluwa Aboyeji, Olugbenga “GB” Agboola (CEO) and Adeleke Adekoya to facilitate cross-border payments in Africa. Since then, it has grown to include a remittance service that allows users to send money to recipients to and from the mainland; a Shopify-like e-commerce platform for small businesses called Flutterwave Store, and Tuition, an education payments platform.
It raised $350 million last year at a valuation of $3 billion, making it one of the most valuable startups in Africa. However, it has not been without controversy as it has to deal with a number of controversies including allegations of harassment, embezzlement and mismanagement.